LACERA earmarks $250m to distressed, special sits funds

The California pension fund is planning to commit to the distressed Black Diamond Opportunity Fund IV and the special situations Clearlake Capital Partners IV.  

The $47 billion Los Angeles County Employees Retirement Association (LACERA) plans to invest $150 million in the Black Diamond Opportunity Fund IV, a distressed debt fund, and $100 million in the Clearlake Capital Partners IV, a special situations fund. The recommendation was made by principal investment officer for private equity, Christopher Wagner, at a board meeting yesterday (20 May).

Santa Monica, CA-based Clearlake Capital Group is in the process of raising $1 billion, with a $1.25 billion hard cap, for its fourth special situations fund. Greenwich, CT-based Black Diamond Capital Management is also raising $1 billion for the distressed debt vehicle.

The Ohio Police & Fire Pension Fund recently decided to cancel its planned $40 million investment to the Black Diamond fund, saying that the environment for mid-market distressed debt arena wasn’t good right now, but that it will continue to evaluate opportunities in the space going forward, as PDI reported earlier this month.

LACERA, meanwhile, made another sizeable distressed debt commitment at the end of last year, investing $100 million in a fund managed by Santa Monica-based Glendon Capital Management, the firm run by Barclays former head of distressed debt, Matthew Barrett, who left the bank in 2013.