LACERA Backs Venture Funds, Takes Action Against Manager

By David G. Barry

The Los Angeles County Employees Retirement Association (LACERA) committed to a pair of venture funds and took action against a public equities manager who is losing two of its partners.
The $72.8 billion plan’s Board of Investments approved a commitment of up to $25 million to Primary Venture Partners IV, L.P., a seed-stage venture fund focused on consumer and business-to-business technology startups, and up to $25 million to Primary Select III, L.P., which will invest in mid-to-later stage Primary Venture Partners’ investments.
The board also said that it took action in executive session related to Genesis Investment Management, LLP. It did not say what that action was, only that it would be reported out in the future. In a note to the board prior to its meeting, LACERA Chief Investment Officer Jonathan Grabel said Yiyong Yang and Rufus Frazier, both of whom are partners and portfolio managers with Genesis, are leaving the firm. Yang is leaving the firm at the end of the year while Frazier is leaving to pursue other interests. Their responsibilities, according to Grabel’s note, are being transitioned to the rest of the portfolio management team.
According to documents presented to LACERA’s board in March, the Genesis Emerging Markets fund had a negative 7% return in 2021. It has a 12% return over three years and a 9.7% over five years. LACERA’s Genesis stake was valued at $637 million at the end of 2021, down from $668 million at the end of the third quarter of 2021.
LACERA also disclosed that in April, it approved a $30 million co-investment commitment alongside Atlantic Street Capital Partners, which LACERA also is backing. The investment that LACERA is backing was not disclosed. Atlantic Street has announced one investment in 2022. In May, it increased its investment in portfolio company Zips Car Wash.