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The $33.9B Los Angeles Fire and Police Pensions (LAFPP) board has earmarked up to $850M as pacing for its private equity allocations for next year, with a target allocation of $800M.
With a pacing range from $750M to $850M, the midpoint target of $800M remains unchanged from 2024 and 2025, reflecting LAFPP’s ongoing commitment to strategic pacing designed to mitigate vintage year risk and maintain liquidity flexibility, according to materials from a recent board meeting.
For 2025, the pension has $105M dry powder remaining for buyout commitments, $30M left for its venture capital allocations, and $110M left for special situations. As of June 30, 2025, LAFPP’s private equity portfolio stood at $5.65B, representing 16.6% of the $34.1B plan, slightly above its 15% policy target but within the range of 11.25% to 18.75%.
Reflecting on the current market environment, the staff discussed how after two years of modest performance with slow distributions and relatively flat overall valuations, the private equity industry experienced a solid rebound in 2024 (especially in the back half of the year) driven by easing of interest rates, moderating inflation, an accommodating credit market, and ample dry powder.
The industry began 2025 with growing momentum and optimism for continued acceleration, but near-term headwinds emerged due to macroeconomic challenges such as regulatory budget cuts, higher import tariffs, volatile public markets, uncertainty around the Federal Reserve, and inflation concerns, noted the meeting materials.
Still, with growing clarity around tariffs (in particular) and expectations of interest rate cuts by the Fed later this year, sentiment within the private equity community is improving and deal activity is beginning to pick up, it added.
Since 2010, LAFPP has raised its private equity target four times, coinciding with significant increases in plan size — from $8.0B to over $34.0B — and has benefited from a self-funded portfolio, disclosed the meeting materials.
The specialized manager program — dedicated to emerging managers raising Funds I–III — continues to be a significant contributor, representing 12.8% of total commitments since inception. A $200M pool approved in 2024 is currently 36% deployed.
The pension fund’s investments within Los Angeles were focused on the consumer (68.5%), information technology (9.7%), and communication services (8.5%) sectors in companies, including Skims, Califia Farms, and Dr. Squatch.
Within the program, the fund allocated 38.6% to buyouts, 13.2% to special situations and 48.2% to venture capital.
