The Los Angeles City Employees’ Retirement System (LACERS) has announced a $25-million commitment to Baring Asia Fund VII, a $5.5-billion fund managed by Hong Kong-based Baring Private Equity Asia.
Baring Asia Fund VII is said to have hit a first close of $4.5 billion in July 2018. It has received a $15 million commitment from Texas Employees Retirement System, $25 million from Los Angeles Fire & Police Pension System and an interest from the Rhode Island State Investment Commission (RISIC).
In May 2018, Cliffwater recommended RISIC to invest up to $50 million in the Asian fund.
Baring Private Equity Asia had invested $8 billion across its six funds, generating a net IRR off 13 per cent and a multiple of 1.4x paid-in capital as of 31 December 2017, Cliffwater said in its recommendation letter.
Baring’s seventh vehicle was said to target mid-large company buyouts across Asia, to consist of as many as 25 investments in companies with enterprise values of $500 million and above, with equity financing in the region of $300-600 million.
During the first nine months of 2018, LACERS announced a total of $345 million commitments, mostly into US-based funds. The pension fund has increased its investments over the last 10 years, from only $33 million in 2009 to $375 million in 2017, it said in a board meeting document.
LACERS also proposed $550-575 million commitments for 2019, with annual increases of around $75 million to $100 million.
Its allocation for private equity is expected to be 12 per cent from the current 9.79 per cent.
US pension funds have been accelerating their Asia investments. Recently, the San Francisco Employees’ Retirement System announced new investments in CMC Capital Partners III and Lightspeed China Partners’s new $560 million fund family.
It had previously invested in a spate of other Asian funds, including Hillhouse Capital, PAG, Asia Alternatives, BFAM Partners, SB China Venture Capital, BGH Capital and Polaris Capital.
In 2017, Beijing-headquartered Sinovation Ventures’ $500 million Sinovation Fund IV bagged $75 million commitment from the Los Angeles County Employees’ Retirement Association.