1q2017 - los angeles department of water and power · 13/09/2017 · wperp private equity...

WPERP Private Equity Performance Report – 1Q2017 Page 1

1Q2017 WATER & POWER EMPLOYEES’ RETIREMENT PLAN (WPERP)Private Equity Performance Report


Private equity is a long-term asset class with performance results influenced by various factors. This report concentrates on severalkey exposures that contribute to performance, including: sector, geography, structure and vintage year. In addition, the broadindustry trends highlighted herein may affect future returns.

As of March 31, 2017, the Program had $879.0 million in commitments across 25 partnerships generating a net since inceptionInternal Rate of Return (IRR) of 9.4%, up from 9.3% the prior quarter and 8.5% one year prior. Strong returns across exposures,particularly distressed debt and energy due to a recovery from recent declines, contributed to improved performance results overthe latest year. Material contribution activity over the past year (26% of current market value) continues to dampen returns asunderlying investments are commonly held at cost during the early periods.

The Program’s reported value represented 3.4% of total Plan assets as of Q1 2017. WPERP’s current target allocation to privateequity is 5% (an increase to 8% over the long-term was approved in September of 2015 by the Board). Including unfundedcommitments of $428.9 million as of Q1 2017 results in an approximate allocation of 7.3% on a total exposure basis (market valueplus unfunded commitments). Subsequent to the reporting period, an additional $298.5 million of commitments have closed orbeen approved, but had yet to begin deploying capital, bringing the approximate allocation to 10.0% on a total exposure basis.Continued commitment activity is required to achieve the target allocation on a market value basis.

WPERP Private Equity Program – one-year change as of March 31, 2017($ Millions)

Committed Contributed Distributed Market Value% of Total

AssetsTarget PE

Allocation MultipleSince Inception

IRR*Beginning of Period $626.5 $387.0 $182.9 $293.4 3.0% 5.0% 1.2x 8.5%End of Period 879.0 480.8 246.3 365.2 3.4% 5.0% 1.3x 9.4%

Change 252.5 93.8 63.4 71.8 0.4% 0.0% 0.1x 0.9%* initial capital call was on June 22, 2006

OVERVIEW


One-Year Three-Year Five-Year Ten-Year Since InceptionWPERP Private Equity 13.3% 9.4% 10.5% 9.3% 9.4%Russell 3000 + 300 bps* 21.3% 12.7% 14.9% 12.8% 12.8%

Variance (8.0%) (3.3%) (4.4%) (3.5%) (3.5%)

The WPERP private equity portfolio underperformed the policy benchmark (Russell 3000 Index plus 300 basis points) over all timeperiods evaluated. The continued strong performance of the public equity markets contributed to the underperformance aspublic equity has generated returns well above long-term expectations while private markets’ appreciation has not kept pace.Given this dynamic, benchmarks utilizing a public equity index plus a premium construct have been difficult to outperform overrecent periods. Relative to the broad private equity market (as represented by the Cambridge Associates Horizon SummaryReport provided on page 16 of this report), the WPERP private equity portfolio outperformed the broad private equity market overthe past one-year, three-year and ten-year periods.

WPERP Private Equity Performance vs. Policy Benchmark as of March 31, 2017

*utilizing the Index Comparison Methodology, which is a public market equivalent calculation exhibiting how an investment would have performed in the public index

Horizon Performance, as of March 31, 2017


The WPERP Private Equity Program is diversified across structure, sector, and geography. Portfolio construction has evolved towardsdirect partnership commitments, but declined to 64% from 80% of total exposure last quarter as the large separately managedaccount by Adams Street began deploying capital. Buyouts, at 65% of market value, is below the broad market as buyoutsrepresent approximately 73% of domestic commitments raised over the past five years (primarily offset by WPERP’s 17% creditrelated exposure). The Program remains domestically oriented, with an 83% exposure to North America.

* includes unfunded commitments

Structure, Sector, and Geographic Diversification, as of March 31, 2017

PORTFOLIO DIVERSIFICATION

Direct Partnerships

77%

Primary fund of funds

8%

Secondary fund of funds

15%

Investment Structure Diversification: market value

Buyout65%

Credit Related17%

Growth9%

Venture9%

Sector Diversification: market value

Direct Partnerships

64%

Primary fund of funds20%

Secondary fund of funds

16%

Investment Structure Diversification: total exposure*

North America

83%

Europe 12%

Asia 3%

ROW 2%

Geographic Diversification: market value


As the Program matures and evolves there are expected tobe variations in vintage year exposure, but the primary goalis to gain exposure across multiple years and across marketcycles. With the exception of 2010, the Program hassuccessfully achieved this diversification to date. Exposureto the 2016 and 2017 vintage years will increase as recentcommitments begin to deploy capital. As the Programstrives to achieve the recently adopted 8% targetallocation, more recent vintages are expected to representa larger proportion of market value as annual commitmentpacing increases.

Based on reported value, the Plan’s portfolio is diversifiedacross industries. The five largest sectors are informationtechnology (40%), energy (15%), consumer (14%), industrials(9%), and financials (7%). The Program’s relatively highexposure to information technology is due primarily tocommitments to Fisher Lynch Capital, Silver Lake Partners,and Vista Equity Partners which are diversified across stageof company.

Industry and Vintage Year Diversification

$0.0$10.0$20.0$30.0$40.0$50.0$60.0$70.0$80.0

Pre-06 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Mill

ions

Vintage Year Diversification

Reported Value

Information Technology

40%

Energy15%

Consumer 14%

Industrials9%

Financials7%

Healthcare8%Other

3%Telecom

2%Materials2%

Industry Diversification: market value


The Program is currently constructed with 25 partnerships committed across 17 investment firms. On a total exposure basis (marketvalue plus unfunded commitments), Vista Equity Partners is the largest exposure at approximately $143 million. This represents 18%of the Program’s total exposure as of March 31, 2017. Adams Street Partners (16%), Ares Management (10%), EnCap Investment(8%), and Landmark Partners (7%) round out the top five relationships by total exposure. Vista’s relative exposure within theProgram is expected to decline as potential re-up commitments to several of the other largest exposures begin investing capital (a$60 million commitment to Ares Corporate Opportunities Fund V and a $50 million commitment to EnCap Energy Capital XI havebeen finalized, but have yet to deploy capital and therefore is not represented above).

Firm Diversification

- 40.0 80.0 120.0 160.0

Oaktree Capital ManagementAudax Group

Capital DynamicsSilver Lake Partners

Fisher Lynch CapitalClayton, Dubilier & Rice

Lexington PartnersHarvest Partners

Apollo Global ManagementIndustry Ventures

Crestview PartnersBlackstone Group

Landmark PartnersEnCap InvestmentsAres Management

Adams Street PartnersVista Equity Partners

Millions

Total Exposure

Reported Value ($) Remaining Unfunded ($)


The Program is in the funding/portfolio construction stage ascontributions (blue bars) represent the largest proportion ofcash flows. The 2015 calendar year represented the largestcapital deployment to date at $102 million. Contributionactivity in 2016 declined slightly to $96 million. Q1 17contribution activity also slowed at $19.1 million, but theProgram has material unfunded commitments that areexpected to increase contribution activity going forward.Distribution activity in the full 2016 calendar year was thehighest level to date at approximately $58 million and 2017distribution activity to date is on pace to match that level.

The value of the portfolio increased by $13.4 million over thelatest quarter driven by contributions and appreciation. Thelargest sources of contribution activity during the quartercame from Harvest Partners VII ($4.6 million), EnCap EnergyCapital Fund X ($2.4 million), Apollo Investment Fund VIII($2.2 million) and Vista Equity Partners V ($1.4 million).

EnCap Energy Capital Fund X ($4.3 million), EnCap EnergyCapital Fund IX ($2.7 million), Lexington Capital Partners VII($1.3 million), and Apollo Investment Fund VIII ($1.3 million)were the largest providers of distributions.

PROGRAM CASH FLOWS

-25%-20%-15%-10%-5%0%5%10%15%20%25%

-$120.0-$100.0

-$80.0-$60.0-$40.0-$20.0

$0.0$20.0$40.0$60.0$80.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1 17

IRR

Milli

ons

Program's Annual Cash Flows and Since Inception IRR

Contributions Distributions Net Cash Flow IRR

$351.8

$19.1$8.8 $365.2-

$14.4

$300.0

$310.0

$320.0

$330.0

$340.0

$350.0

$360.0

$370.0

$380.0

12/31/2016 Contributions Distributions ValuationChange

3/31/2017

Milli

ons

Quarterly Reprted Value Activity


Another way to view a program’s progress is to examine thecontributions, distributions, and reported value of aportfolio. Given the nature of private market investing, it isnot uncommon for contributions to exceed distributions andreported value as investments are initially held at cost andmanagement fees are assessed early in the partnership. TheProgram’s investment multiple of 1.27x, as of March 31, 2017,was up slightly from 1.26x as of year-end 2016. The chartportrays the historical trend of these since-inceptioncomponents.

To compare performance across time periods relative tothe policy benchmark, PCA calculates customized “cashflow adjusted” benchmark returns utilizing the IndexComparison Methodology. The Program underperformedthe policy benchmark across all periods evaluated. Thechart to the right differentiates Program performance bythe maturity of the underlying partnership. As to beexpected, the less mature vintages (2014 to 2017)underperformed on a since inception basis. A rebound in oil& gas and distressed debt exposures from prior lowsbolstered the performance for new vintages over the latestone-year period. The older vintages (2006 to 2013) haveperformed closer to the policy benchmark over longerperiods.

PERFORMANCE METRICS

13.3%

9.4%10.5%

9.3% 9.4%

13.6%

10.9% 11.6%9.9% 9.9%

12.7%

4.3%

21.3%

12.7%

14.9%

12.8% 12.8%

0%

5%

10%

15%

20%

25%

One-Year Three-Year Five-Year Ten-Year Since Inception*

Horiz

on IR

R

Cash Flow Adjusted Benchmark Comparison: periods ending March 31, 2017

WPERP Portfolio Older Vintages (2006-2013)

Newer Vintages (2014-2017) Russell 3000 Index + 300 bps*initial capital call made in June of 2006

1.02x1.14x 0.85x 0.99x

1.13x1.16x

1.20x1.28x

1.29x

1.25x

1.26x 1.27x

$0.0$50.0

$100.0$150.0$200.0$250.0$300.0$350.0$400.0$450.0$500.0$550.0$600.0$650.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1 17

Program Investment Multiple

Contributions Program Reported Value Distributions

Millions


As of March 31, 2017, approximately 55% of the Plan’s committed capital for active partnerships had been invested and theProgram had developed a diversified portfolio of underlying private equity investments. Of the 18 partnerships with sufficientperformance history, 11 of the partnerships placed at or above–median while four placed in the top-quartile among theirrespective peer universes, according to Cambridge Associates data as of March 31, 2017. (“NM” represents “not meaningful” asthe performance history is too short.)

[1] Source: Cambridge Associates Benchmark Calculator on Thomson One, by vintage year and sector as of March 31, 2017.

Program Partnerships, as of March 31, 2017

* management fee assessed during the investment period, ** blended rate

PORTFOLIO DETAIL

Partnership Type Vintage

Year Management

Fee*Committed

Capital ($ M)Inv ested

Capital ($ M)Distributed

Capital ($ M)Reported

Value ($ M)MOIC

Since Inception

Net IRR

Peer Median

IRR

Top Quartile

IRRLexington Capital Partners VI Secondary Fund 2006 1.00% 30.0 31.8 36.0 7.3 1.4x 6.8% 7.4% 11.3%Landmark Equity Partners XIII Secondary Fund 2006 0.89%** 30.0 28.8 27.8 8.6 1.3x 5.2% 7.4% 11.3%HRJ Special Opportunities Fund II Primary Fund of Funds 2007 0.90% 20.0 18.0 19.2 8.4 1.5x 7.2% 7.6% 13.6%Fisher Lynch Venture Fund II Primary Fund of Funds 2008 1.00% 20.0 17.6 10.3 19.0 1.7x 10.5% 8.2% 18.6%Landmark Equity Partners XIV Secondary Fund 2008 1.00% 30.0 28.2 24.8 11.8 1.3x 10.2% 10.3% 15.7%Oaktree Principal Fund V Distressed Debt 2009 1.60% 16.0 15.0 9.2 8.2 1.2x 3.6% 13.9% 20.9%Lexington Capital Partners VII Secondary Fund 2009 0.95%** 30.0 26.0 26.6 12.6 1.5x 14.8% 13.1% 19.5%Audax Mezzanine Fund III Mezzanine 2011 1.00% 17.0 15.0 10.0 8.8 1.3x 9.6% 8.2% 11.8%EnCap Energy Capital Fund VIII Growth: oil and gas 2011 1.50% 12.5 12.7 6.3 5.5 0.9x -3.3% 12.1% 19.2%Vista Equity Partners Fund IV Buyout 2011 1.50% 25.0 24.5 13.6 32.1 1.9x 20.1% 12.1% 19.2%Ares Corporate Opportunities IV Special Situations 2012 1.50% 25.0 22.7 6.3 24.6 1.4x 15.2% 12.7% 17.3%EnCap Energy Capital Fund IX Growth: oil and gas 2013 1.50% 17.0 16.3 9.7 12.5 1.4x 20.0% 10.6% 18.5%Silv er Lake Partners IV Buyout 2013 1.50% 18.0 13.5 6.0 14.0 1.5x 31.5% 10.6% 18.5%Apollo Inv estment Fund VIII Buyout 2013 1.19%** 34.0 24.1 4.6 23.3 1.2x 13.2% 10.6% 18.5%Landmark Equity Partners XV Secondary Fund 2013 1.00% 40.0 17.8 7.7 13.4 1.2x 12.4% 10.3% 16.6%Clayton, Dubilier & Rice Fund IX Buyout 2013 1.50% 25.0 17.5 6.9 17.6 1.4x 23.9% 10.6% 18.5%Vista Equity Partners V Buyout 2014 1.50% 50.0 49.9 9.3 49.0 1.2x 10.4% 9.5% 17.7%Crestv iew Partners III Buyout 2014 1.75% 50.0 15.6 0.3 15.2 1.0x -0.9% 9.5% 17.7%Ares Special Situations Fund IV Distressed Debt 2015 1.38% 50.0 18.9 4.0 9.5 0.7x -18.9% NM NMEnCap Energy Capital Fund X Growth: oil and gas 2015 1.50% 37.0 14.1 4.7 12.3 1.2x 25.9% NM NMBlackstone Tactical Opportunities II Debt Related 2015 1.50% 50.0 23.5 3.1 23.7 1.1x 11.6% NM NMVista Equity Partners VI Buyout 2016 1.50% 60.0 22.5 0.0 22.1 1.0x -2.2% NM NMHarv est Partners VII Buyout 2016 2.00% 30.0 5.0 0.0 4.4 0.9x -45.8% NM NMAdams Street Global SMB WPERP Fund of Funds 2016 0.30%** 125.0 1.2 0.0 1.0 0.8x -16.1% NM NMIndustry Ventures Secondary VIII, Secondaries 2016 1.50% 37.5 0.5 0.0 0.5 1.1x 6.7% NM NMTotal Program --- --- --- 879.0 480.8 246.3 365.2 1.3x 9.4% --- ---


WPERP’s private equity program has matched or outperformed the vintage year peer median five of eight years where thereare measureable results on an IRR basis and outperformed in three years on a Multiple of Invested Capital basis.

[1] Source: Cambridge Associates Benchmark Calculator on Thomson One, by vintage year as of March 31, 2017

Vintage Year Performance, as of March 31, 2017($ Millions)

Vintage Year

Committed Capital ($ M)

Invested Capital ($ M)

Distributed Capital ($ M)

ReportedValue ($ M) Net MOIC

Since Inception

Net IRR

Peer Median MOIC1

Peer Median

IRR1

2006 60.0 60.6 63.8 15.9 1.32x 6.0% 1.39x 6.0%

2007 20.0 18.0 19.2 8.4 1.53x 7.2% 1.45x 7.9%

2008 50.0 45.8 35.1 30.8 1.44x 10.4% 1.45x 9.1%

2009 46.0 41.1 35.8 20.8 1.38x 10.1% 1.53x 12.4%

2011 54.5 52.2 29.9 46.3 1.46x 13.6% 1.45x 11.2%

2012 25.0 22.7 6.3 22.6 1.27x 15.2% 1.30x 11.8%

2013 134.0 89.2 34.9 80.8 1.30x 19.6% 1.21x 10.9%

2014 100.0 65.5 9.5 64.1 1.12x 8.1% 1.13x 10.5%

2015 137.0 56.6 11.8 45.4 1.01x 1.0% --- ---

2016 215.0 28.7 --- 27.5 0.96x (6.2%) --- ---

2017 37.5 0.5 --- 0.5 1.0x 6.7% --- ---

Total 716.5 480.8 246.3 365.2 1.27x 9.4% --- ---


Fund Type Commitment Board Approval Initial Funding

Ares Corporate Opportunities Fund V Buyout/Special Situations $60.0 M 10/28/2015 6/22/2017

Industry Ventures Secondary VIII Secondaries: venture capital $60.0 M* 5/11/2016 3/8/2017

Adams Street Global SMB WPERP Fund Fund of Funds: small buyout $125.0 M** 9/14/2016 2/16/2017

Clayton, Dubilier & Rice Fund X Buyout: generalist $54 M 1/11/2017 NA

Silver Lake Partners V Buyout: information technology $58 M 2/8/2017 NA

Apollo Investment Fund IX Buyout/Special Situations $54 M 3/8/2017 NA

EnCap Energy Capital Fund XI Growth: oil and gas $50 M 4/12/2017 NA

Recent/Pending Retirement Plan Commitments

* Includes commitment to Industry Ventures Special Opportunities Fund III-A (the “Overage Fund”)** To be committed to underlying partnerships over a three-year period

As private equity is a self-liquidating asset class, ongoing commitment activity is necessary to meet and maintain the target assetallocation level. Annual commitment targets are $260 million (up to $340 million) for the Retirement Plan and $52 million for theHealth Fund (up to $68 million).

The table above represents recent commitments made for the Retirement Plan and includes both the date approved by theBoard and the date of the initial capital call. As of the production of this report, one fund (representing $60 million ofcommitments) made its initial capital call subsequent to quarter-end. In addition, there were four partnerships (representing $216million of commitments) that had been approved but had not yet drawn capital.


INDUSTRY TRENDS

• Fundraising activity in 1H 2017 was on pace to achieve record levels. After raising $312 billion in 2016, approximately $181billion was raised domestically in the first half of 2017. Annualized, this is on pace to achieve over $360 billion for the 2017calendar year, exceeding the $325 billion raised in 2007. Buyouts continue to represent the largest proportion ofcommitments at approximately 75% for the first six months of 2017. It continues to be an environment of the “haves” andthe “have nots” as the most sought after managers are quickly achieving established hard caps.

• Announced U.S. buyout deal volume for 2016 was in-line with 2015. Total announced U.S. buyout deal volume in the first halfof 2017 was $192 billion, on pace to exceed the $311 billion in 2016. The second quarter of 2017 exhibited an increase to$120 billion of announced deal volume during the quarter, the largest amount since Q4 2007.

• Risk metrics in the buyout market remain high as both purchase price multiples and debt multiples are above their ten-yearaverages. The average purchase price multiple in 1H 2017, at 10.3x, increased from 10.0x in 2016 and is above the ten-yearaverage of 9.1x. Debt multiples in 1H 2017 were at 5.8x, above the 5.5x level for the 2016 calendar year and the ten-yearaverage of 5.3x.

• Venture capital investment activity increased in the first half of 2017. Approximately $33 billion was invested across 2,358companies in 1H 2017, on pace to slightly exceed the $63 billion invested in the 2016 calendar year.

• Exit activity for venture capital investments was mixed in 1H 2017. The value of merger and acquisition (M&A) transactionsslowed slightly in the 1H 2017 and is on pace to trail 2016. The initial public offering (IPO) market increased slightly in the firsthalf of 2017 and is on pace to exceed 2016 levels.

• The outlook for distressed debt investment strategies remains uncertain. Debt pricing has stabilized after recent volatility(according to the Leveraged Loan Index produced by the Loan Syndications and Trading Association), potentiallydecreasing the near-term opportunity set for trading strategies. The high yield and leveraged loan markets are large, butdefault rates have remained low dampening the situations for distressed-for-control opportunities.


This section examines the private equity market environment including fundraising, purchase price multiples, debt multiples,distressed debt, U.S. venture capital trends, and private equity market performance.

• Buyout transaction activity increased in 1H 2017, with Q2 2017 the largest quarter since Q4 2007.

• Domestic and Non-U.S. fundraising activities continued to exhibit annual increases with 1H 17 on pace to continue upward trend.

PRIVATE MARKET OVERVIEW

$0

$50

$100

$150

$200

$250

$300

$350

$400

2008 2009 2010 2011 2012 2013 2014 2015 2016 1H 17

Billi

ons

Year

Commitments to U.S. Private Equity Partnerships

Buyouts Venture Mezzanine Secondary and Other Fund of funds Annualized

Source: Private Equity Analyst through June 2017

$0

$50

$100

$150

$200

$250

$300

$350

2008 2009 2010 2011 2012 2013 2014 2015 2016 1H 17

Billi

ons

Year

Commitments to Non-U.S. Private Equity

Asia Private Equity Fundraising European Fund Private Equity Fundraising

Source: Thomson Reuters, through June 2017

0%

10%

20%

30%

40%

50%

60%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1H 17

% E

quity

Con

tribu

tion

Year

Equity Contribution

Source: S&P Global


•LBO transactions continued to be expensive, both domestically and in Europe…

• …while use of leverage also continued to be high.

9.7x9.1x

7.7x8.5x 8.8x 8.7x 8.8x

9.7x10.3x

10.0x10.3x

0.0

2.0

4.0

6.0

8.0

10.0

12.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1H 17

TEV/

EBITD

A

Year

Average U.S. Purchase Price Multiples

Source: S&P Global

10.3x 10.4x

8.9x9.7x

9.2x 9.5x8.7x

10.2x 10.2x 10.5x11.2x

0.0

2.0

4.0

6.0

8.0

10.0

12.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1H 17

TEV/

EBITD

A

Year

Average European Purchase Price Multiples

*Transaction size of €500M or moreSource: S&P Global

6.2x

4.9x

4.0x4.7x

5.2x 5.3x 5.4x5.8x 5.7x 5.5x

5.8x

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1H 17

Debt

/EBI

TDA

Year

Average U.S. Large LBO Debt Multiples

*Large defined as issues with EBITDA >$50M,Source: S&P Global

6.3x

5.2x

4.1x 4.4x 4.5x 4.3x4.7x

5.4x 5.2x 5.1x 5.1x

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1H 17

Debt

/EBI

TDA

Year

Average European Debt Multiples

Source: S&P Global


• Default rates remained low and pricing recovered, but the opportunity set for distressed could grow materially with increased volatility.

• Venture capital investment activity slowed in 2016, but rebounded modestly in 1H 2017.

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

High Yield Default Rates

High Yield Default Rate Avg. HY Default Rate

Source: Moody's Investor Service

50

60

70

80

90

100

110Ja

n-08

Apr

-08

Jul-0

8O

ct-0

8Ja

n-09

Apr

-09

Jul-0

9O

ct-0

9Ja

n-10

Apr

-10

Jul-1

0O

ct-1

0Ja

n-11

Apr

-11

Jul-1

1O

ct-1

1Ja

n-12

Apr

-12

Jul-1

2O

ct-1

2Ja

n-13

Apr

-13

Jul-1

3O

ct-1

3Ja

n-14

Apr

-14

Jul-1

4O

ct-1

4Ja

n-15

Apr

-15

Jul-1

5O

ct-1

5Ja

n-16

Apr

-16

Jul-1

6O

ct-1

6Ja

n-17

Apr

-17

Jul-1

7

Avg

. Bid

Lev

el

Leveraged Loan Index

Source: Loan Syndications and Trading Association (LSTA)


• Exit environment for venture capital was relatively stable in the 1H 2017.

• Buyouts exhibited a strong 14.6% over the latest year and have exhibited longer-term stability.

• Public equity continued its strong performance, posting returns above long-term expectations.

Cambridge Associates Horizon Summary Reportas of March 31, 2017

Fund Type 1 Yr 3 Yr 5 Yr 10 Yr 15 Yr 20 YrVenture Capital 6.8% 12.3% 14.4% 9.7% 7.7% 21.2%Growth Equity 12.0% 9.7% 11.5% 10.3% 11.4% 13.6%Buyout 14.6% 10.3% 12.8% 9.2% 13.5% 12.6%Mezzanine 9.5% 8.1% 9.7% 8.8% 9.5% 9.1%Distressed 14.7% 6.8% 10.5% 9.3% 10.8% 10.7%Private Equity Energy 24.1% -0.7% 1.9% 5.5% 10.1% 10.2%Upstream Energy & Royalties 11.2% -11.7% -5.9% 2.5% 10.9% 10.4%Timber 2.6% 2.4% 4.9% 3.7% 4.3% 4.3%Real Estate 7.6% 10.5% 11.2% 4.1% 6.8% 7.2%Infrastructure 9.9% 9.4% 9.1% 7.2% 7.6% 6.9%Fund of Funds 7.6% 8.7% 10.4% 8.1% 8.9% 8.9%Secondary Funds 8.2% 8.6% 10.5% 9.5% 11.8% 12.0%Total 11.9% 9.1% 11.3% 8.3% 10.7% 11.7%

Public Market Performance Comparision, as of March 31, 2017Fund Type 1 Yr 3 Yr 5 Yr 10 Yr 20 Yr

All Private Equity 11.9% 9.1% 11.3% 8.3% 11.7%Russell 3000 18.1% 9.8% 13.2% 7.5% 8.1%Russell 2000 26.2% 7.2% 12.4% 7.1% 8.7%MSCI EAFE 12.2% 1.0% 6.3% 1.5% 5.0%BC Aggregate 0.4% 2.7% 2.3% 4.3% 5.4%


This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization withoutprior written approval from Pension Consulting Alliance, LLC.

This document is provided for informational purposes only. It does not constitute an offer of securities of any of the issuers that may be described herein.Information contained herein may have been provided by third parties, including investment firms providing information on returns and assets undermanagement, and may not have been independently verified. The past performance information contained in this report is not necessarily indicative of futureresults and there is no assurance that the investment in question will achieve comparable results or that the Firm will be able to implement its investment strategyor achieve its investment objectives. The actual realized value of currently unrealized investments (if any) will depend on a variety of factors, including futureoperating results, the value of the assets and market conditions at the time of disposition, any related transaction costs and the timing and manner of sale, all ofwhich may differ from the assumptions and circumstances on which any current unrealized valuations are based.

Neither PCA nor PCA’s officers, employees or agents, make any representation or warranty, express or implied, in relation to the accuracy or completeness of theinformation contained in this document or any oral information provided in connection herewith, or any data subsequently generated herefrom, and accept noresponsibility, obligation or liability (whether direct or indirect, in contract, tort or otherwise) in relation to any of such information. PCA and PCA’s officers,employees and agents expressly disclaim any and all liability that may be based on this document and any errors therein or omissions therefrom. Neither PCA norany of PCA’s officers, employees or agents, make any representation of warranty, express or implied, that any transaction has been or may be effected on theterms or in the manner stated in this document, or as to the achievement or reasonableness of future projections, management targets, estimates, prospects orreturns, if any. Any views or terms contained herein are preliminary only, and are based on financial, economic, market and other conditions prevailing as of thedate of this document and are therefore subject to change.

The information contained in this report may include forward-looking statements. Forward-looking statements include a number of risks, uncertainties and otherfactors beyond the control of the Firm, which may result in material differences in actual results, performance or other expectations. The opinions, estimates andanalyses reflect PCA’s current judgment, which may change in the future.

Any tables, graphs or charts relating to past performance included in this report are intended only to illustrate investment performance for the historical periodsshown. Such tables, graphs and charts are not intended to predict future performance and should not be used as the basis for an investment decision.All trademarks or product names mentioned herein are the property of their respective owners. Indices are unmanaged and one cannot invest directly in anindex. The index data provided is on an “as is” basis. In no event shall the index providers or its affiliates have any liability of any kind in connection with the indexdata or the portfolio described herein. Copying or redistributing the index data is strictly prohibited.

The Russell indices are either registered trademarks or tradenames of Frank Russell Company in the U.S. and/or other countries.This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization withoutprior written approval from Pension Consulting Alliance, Inc.

Nothing herein is intended to serve as investment advice, a recommendation of any particular investment or type of investment, a suggestion of the merits ofpurchasing or selling securities, or an invitation or inducement to engage in investment activity.

I t tI t t S tt ib ti tt d V lt t M ll I t tA (Y )D t ($)itt d ($)N t IRRi i U f dl E ($) All P tf li I t tlti l f C P i t E it T ki S h d l3/31/2017G BG BG B L A l DLos Angeles Department of Water and Power Employees' Retirement Plan

Private Equity Tracking Schedule

Investments

Total Capital Committed ($)

ReportedValue ($)

ActualContributionto Date* ($)

InvestmentSector

RemainingUnfunded ($)

Date ofInitialInvestment

NetIRR

TotalDistributionto Date ($)

TotalExposure ($) Multiple3/31/2017

As of:

Lexington Capital Partners VI Holdings, L.P. Secondaries Jun-06 30,000,000 31,839,795 490,410 36,014,403 7,281,111 7,771,521 1.4x 6.8%Landmark Equity Partners XIII, L.P. Secondaries Nov-06 30,000,000 28,798,328 1,201,672 27,828,918 8,618,890 9,820,562 1.3x 5.2%HRJ Special Opportunities II, L.P. Fund of Funds Mar-08 20,000,000 17,950,000 4,750,000 19,150,000 8,443,849 13,193,849 1.5x 7.2%Fisher Lynch Venture Partnership II, LP Fund of Funds May-08 20,000,000 17,630,000 2,370,000 10,262,595 18,996,384 21,366,384 1.7x 10.5%Landmark Equity Partners XIV, L.P. Secondaries Sep-08 30,000,000 28,219,693 1,780,307 24,844,605 11,846,808 13,627,115 1.3x 10.2%Oaktree Principal Fund V, L.P. Debt Related Feb-09 16,000,000 15,038,733 1,761,267 9,176,182 8,176,192 9,937,459 1.2x 3.6%Lexington Capital Partners VII, L.P. Secondaries Dec-09 30,000,000 26,020,893 6,073,546 26,574,182 12,603,610 18,677,156 1.5x 14.8%Audax Mezzanine Fund III, L.P. Debt Related Feb-11 17,000,000 15,004,188 1,995,812 10,022,907 8,752,463 10,748,275 1.3x 9.6%EnCap Energy Capital Fund VIII, L.P. Growth Feb-11 12,500,000 12,693,354 1,274,341 6,264,340 5,451,153 6,725,494 0.9x -3.3%Vista Equity Partners IV, L.P. Buyout Nov-11 25,000,000 24,470,438 2,657,177 13,596,054 32,067,157 34,724,334 1.9x 20.1%Ares Corporate Opportunities Fund IV, L.P. Buyout Nov-12 25,000,000 22,718,196 6,318,882 6,301,743 24,628,209 30,947,091 1.4x 15.2%EnCap Energy Capital Fund IX, L.P. Growth Jan-13 17,000,000 16,300,788 3,716,044 9,685,635 12,476,803 16,192,847 1.4x 20.0%Silver Lake Partners IV, L.P. Buyout Oct-13 18,000,000 13,505,406 5,852,362 5,950,628 13,998,786 19,851,148 1.5x 31.5%Apollo Investment Fund VIII Buyout Feb-14 34,000,000 24,079,842 13,452,973 4,607,929 23,297,519 36,750,492 1.2x 13.2%Landmark Equity Partners XV, L.P. Secondaries Mar-14 40,000,000 17,788,480 22,211,520 7,714,179 13,416,182 35,627,702 1.2x 12.4%Clayton, Dubilier & Rice Fund IX, L.P. Buyout Mar-14 25,000,000 17,485,779 7,589,035 6,935,118 17,625,213 25,214,248 1.4x 23.9%Vista Equity Partners V, L.P. Buyout May-14 50,000,000 49,938,252 61,748 9,259,423 48,964,851 49,026,599 1.2x 10.4%Crestview Partners III, L.P. Buyout Jan-15 50,000,000 15,604,913 34,532,728 252,710 15,162,313 49,695,041 1.0x -0.9%Ares Special Situations Fund IV, L.P. Debt Related Feb-15 50,000,000 18,893,825 35,115,512 4,038,673 9,483,727 44,599,239 0.7x -18.9%EnCap Energy Capital Fund X, L.P. Growth Mar-15 37,000,000 14,129,761 25,120,388 4,725,992 12,275,918 37,396,305 1.2x 25.9%Blackstone Tactical Opportunities Fund II, L.P.Debt Related May-15 50,000,000 23,534,854 27,181,527 3,075,214 23,688,063 50,869,590 1.1x 11.6%Vista Equity Partners VI, L.P. Buyout Apr-16 60,000,000 22,526,322 37,473,678 0 22,066,433 59,540,111 1.0x -2.2%Harvest Partners VII, L.P. Buyout Jul-16 30,000,000 4,975,674 25,024,326 0 4,434,269 29,458,595 0.9x -45.8%Adams Street Global SMB WPERP Fund L.P. Buyout Feb-17 125,000,000 1,187,500 123,812,500 0 996,551 124,809,051 0.8x -16.1%Industry Ventures Secondary VIII, L.P. Secondaries Feb-17 37,500,000 450,000 37,050,000 0 480,200 37,530,200 1.1x 6.7%

$480,785,015 $428,867,754 $365,232,653 $794,100,407$879,000,000 $246,281,430 9.4%1.3xTotal Portfolio

All TotalAllAll

* May exceed committed capital due to recycling of recallable distributions.

A-1

Los Angeles Department of Water and Power Employees' Retirement PlanAdams Street Global SMB WPERP Fund L.P.

The Fund will seek to complete 8-12 primary fund commitments to small market buyout managers, expected to represent at least 80% of the Fund’s total capitalization. Up to 20% may be invested in small market buyout co-investments. The Fund will have a bias toward North American managers, although up to 25% can be invested in Western European fundsand co-investments. It is expected that the Fund will be fully committed to underlying funds and co-investments within approximately 2.5 to 3.0 years, though actual deployment of capital may vary depending on the opportunity set.

Investment Strategy

Original CommitmentAmount ContributedDistributionsReported Value 996,551

Internal rate of return to dateTotal Value Multiple

-16.1%0.8x

0

125,000,0001,187,500

Investment Review

Remaining to be invested 123,812,500Age of fund (in years) 0.1

Percent of capital returned

$$$$$

Total Number of Portfolio Companies0%

1

Top 10 Portfolio Investments SectorInvestment Date

DataBank Financial ServicesFeb-17

Portfolio Profile

Contributions Dis tributions NAV IR R

3/31/20171,000,000

800,000

600,000

400,000

200,000

0

(200,000)

(400,000)

(600,000)

(800,000)

(1,000,000)

(1,200,000)

IRR(16.1%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Feb-17Target termination dateInvestment strategy BuyoutAsset Class Private Equity FundsFund Manager Adams Street Partners, LLCVintage Year 2016Fund Size 150,000,000% Drawn 0.9%Client % ownership 83.3%

Fund Profile

Total CapitalContributed ($)

Valuation ($)

(in M

illion

s)

5

0

TotalDis tributions ($)

Cash Flow and Valuation Summary Since Inception

22-Aug-2017 15:43:01

A-2

Los Angeles Department of Water and Power Employees' Retirement PlanApollo Investment Fund VIII

Apollo will implement three strategies with a value-orientation and contrarian footing: distressed, corporate carve-outs, and opportunistic buyouts. The investment strategy allows for nimble investing across market cycles. Apollo will work with management, rationalize non-core and underperforming assets, maximize liquidity, and engage in M&A and JV when appropriate. Apollo is, largely, an industry generalist and has the ability to create and complete complex transactions and structuring.

Investment Strategy

Original CommitmentAmount ContributedDistributionsReported Value 23,297,519


13.2%1.2x

4,607,929

34,000,00024,083,176

Investment Review



$$$$$


26


ADT Business ServicesJul-15Presidio Business ServicesFeb-15Outerwall Consumer ServicesSep-16Diamond Resorts HospitalitySep-16Jupiter Resources Oil & Gas Exploration and ProductionJun-14Apollo Education Group EducationFeb-17CEC Entertainment, Inc. Entertainment and LeisureJan-14Rackspace Business ServicesDec-16Maxim Crane / AmQuip IndustrialsDec-16RegionalCare HealthcareDec-15

Portfolio Profile


3/31/2014

6/30/2014

9/30/2014

12/31/2014

3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

22,000,00020,000,00018,000,00016,000,00014,000,00012,000,00010,000,000

8,000,0006,000,0004,000,0002,000,000

0(2,000,000)(4,000,000)

IRR

10.0%

5.0%

0.0%

(5.0%)

(10.0%)

(15.0%)

(20.0%)

(25.0%)

(30.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Feb-14Target termination date Dec-23Investment strategy BuyoutAsset Class Private Equity FundsFund Manager Apollo Global Management, LLCVintage Year 2013Fund Size 18,400,000,000% Drawn 60.4%Client % ownership 0.2%

Fund Profile


Valuation ($)

(in M

illion

s)

50

40

30

20

10

0



22-Aug-2017 15:43:01

A-3

Los Angeles Department of Water and Power Employees' Retirement PlanAres Corporate Opportunities Fund IV, L.P.

ACOF IV pursues opportunistic investments in middle-market companies targeting investment sizes generally in the $100 to $400 million range. ACOF IV seeks opportunities primarily in under-capitalized middle market companies with strong franchises that have not fully exploited their growth opportunities. A company’s failure to exploit its growth opportunities typically stems from: (i) a lack of available capital, either because the company is over-leveraged or in distress, (ii) the existing owner’s unwillingness or inability to inject additional capital into the business to fund growth or (iii) a management team’s lack of depth or inability to focus on growth.

Investment Strategy



15.2%1.4x

6,301,743

25,000,00022,718,196

Investment Review



$$$$$


21


Clayton Williams Energy Oil and GasMar-16National Veterinary Associates HealthcareAug-14AOT Building Products (CPG Internationa) Manufacture of Building ProductsSep-13American Tire Distributors IndustrialsFeb-15Smart & Final Stores LLC Consumer StaplesNov-12Valet Waste Holdings, Inc. IndustrialsSep-15Coordinated Women's Care, L.P. Medical/Health RelatedJul-13Farrow & Ball manufacturer/retailer of premium branded paintNov-14BlackBrush Oil & Gas Oil and GasJul-14London Square Developments Real EstateJul-14

Portfolio Profile


12/31/2012

3/31/2013

6/30/2013

9/30/2013

12/31/2013

3/31/2014

6/30/2014

9/30/2014

12/31/2014

3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

24,000,00022,000,00020,000,00018,000,00016,000,00014,000,00012,000,00010,000,000

8,000,0006,000,0004,000,0002,000,000

0(2,000,000)(4,000,000)

IRR

15.0%

10.0%

5.0%

0.0%

(5.0%)

(10.0%)

(15.0%)

(20.0%)

(25.0%)

(30.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Nov-12Target termination date Nov-22Investment strategy BuyoutAsset Class Private Equity FundsFund Manager Ares Management, LLCVintage Year 2012Fund Size 4,700,000,000% Drawn 74.7%Client % ownership 0.5%

Fund Profile


Valuation ($)

(in M

illion

s)

50

40

30

20

10

0



22-Aug-2017 15:43:01

A-4

Los Angeles Department of Water and Power Employees' Retirement PlanAres Special Situations Fund IV, L.P.

Ares SSF IV seeks to capitalize on stressed and distressed opportunities, dislocated and out-of-favor assets and other special situations by deploying flexible capital across multiple geographies, industries and asset types. The Fund will target 30-40 total investments in global opportunities with a focus on North America (excluding Mexico), Western Europe and Australia. With respect to core distressed debt, rescue capital, and post-reorganization equity positions, the Fund will generally target portfolio companies with total debt capitalizations of no less than $500 million.

Investment Strategy



-18.9%0.7x

4,038,673

50,000,00018,882,309

Investment Review



$$$$$


19


Corporate Debt DebtJun-15Common Stock EquityJun-15Bank Loans DebtJun-15Preferred Stock EquitySep-16Collateralized Loan Obligations DebtJun-15

Portfolio Profile


3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0

(2,000,000)

(4,000,000)

(6,000,000)

(8,000,000)

IRR

(10.0%)

(15.0%)

(20.0%)

(25.0%)

(30.0%)

(35.0%)

(40.0%)

(45.0%)

(50.0%)

(55.0%)

(60.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Feb-15Target termination date Aug-22Investment strategy Debt RelatedAsset Class Private Equity FundsFund Manager Ares Management, LLCVintage Year 2015Fund Size 1,500,000,000% Drawn 29.8%Client % ownership 3.3%

Fund Profile


Valuation ($)

(in M

illion

s)

30

25

20

15

10

5

0



22-Aug-2017 15:43:01

A-5

Los Angeles Department of Water and Power Employees' Retirement PlanAudax Mezzanine Fund III, L.P.

Audax Mezzanine implements an investment strategy, targeting middle market companies in change of control transactions sponsored by leading private equity firms. The Fund is expected to continue to construct a portfolio with debt and equity components that may include senior debt, subordinated debt, convertible debt, preferred stock, common stock and/or common stock warrants. Target companies will have $10 million to $60 million of EBITDA and be diversified across size and industry.

Investment Strategy



9.6%1.3x

10,022,907

17,000,00015,004,188

Investment Review



$$$$$


22


PlayCore Holdings, Inc. ManufacturingMay-14Cross MediaWorks, LLC Media Related ServicesJul-13IntraPac International Corporation Packaging Products & SystemsDec-11Area Wide Protective, Inc. TransportationJun-15Integrated Power Services, LLC Industrial ServicesJul-13Engineered Controls International, LLC ManufacturingDec-13Chesapeake IRB Business ServicesDec-15Rio Brands ConsumerMar-15CenterPlate, Inc. Other RestaurantsOct-12Archway Marketing Services, Inc. Consulting ServicesJul-12

Portfolio Profile


3/31/2011

6/30/2011

9/30/2011

12/31/2011

3/31/2012

6/30/2012

9/30/2012

12/31/2012

3/31/2013

6/30/2013

9/30/2013

12/31/2013

3/31/2014

6/30/2014

9/30/2014

12/31/2014

3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

9,000,000

8,000,000

7,000,000

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

0

(1,000,000)

(2,000,000)

IRR

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

(2.0%)

(4.0%)

(6.0%)

(8.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Feb-11Target termination date Jan-21Investment strategy Debt RelatedAsset Class Private Equity FundsFund Manager Audax GroupVintage Year 2011Fund Size 1,002,250,000% Drawn 88.3%Client % ownership 1.7%

Fund Profile


Valuation ($)

(in M

illion

s)

30

25

20

15

10

5

0



22-Aug-2017 15:43:01

A-6

Los Angeles Department of Water and Power Employees' Retirement PlanBlackstone Tactical Opportunities Fund II, L.P.

BTOF II seeks to implement an opportunistic investment strategy to capitalize on a perceived high volume of attractive non-traditional investment opportunities that are available to Blackstone. These opportunities may include (1) equity, credit and real asset investments, (2) investments across the capital structure, from lower volatility/yield to common equity, and (3) investments in North America, Europe, Asia, Latin America and the Middle East. The Fund’s strategy is based upon Blackstone’s belief that markets change rapidly and attractive opportunities are often ephemeral.

Investment Strategy



11.6%1.1x

3,075,214

50,000,00023,566,765

Investment Review



$$$$$


25


T4U / Phoenix Towers do Brasil TelecomJun-15Northview Group Specialty FinanceJan-15Czech Resi (RPG Byty) Real EstateNov-15Targa Resources EnergyMar-16NCR Corporation Information TechnologyDec-15JDA Software Information TechnologyOct-16Pretium MiningSep-15Diamond Direct Retail and ConsumerNov-15Finance of America II Specialty FinanceApr-15Viva Capital Limited II FinancialsOct-15

Portfolio Profile


6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

24,000,00022,000,00020,000,00018,000,00016,000,00014,000,00012,000,00010,000,000

8,000,0006,000,0004,000,0002,000,000

0(2,000,000)(4,000,000)(6,000,000)

IRR

12.0%10.0%8.0%6.0%4.0%2.0%0.0%(2.0%)(4.0%)(6.0%)(8.0%)(10.0%)(12.0%)(14.0%)(16.0%)(18.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment May-15Target termination dateInvestment strategy Debt RelatedAsset Class Private Equity FundsFund Manager Blackstone Group, TheVintage Year 2015Fund Size 2,647,787,742% Drawn 45.6%Client % ownership 1.9%

Fund Profile


Valuation ($)

(in M

illion

s)

50

40

30

20

10

0



22-Aug-2017 15:43:01

A-7

Los Angeles Department of Water and Power Employees' Retirement PlanClayton, Dubilier & Rice Fund IX, L.P.

CD&R is a buyout specialist, focusing on acquiring North American and Western European businesses with market leading positions and implementing operational improvements, primarily in the consumer, healthcare, services and industrial sectors. The Firm’s six key investment tenets are (1) a singular organizational focus on leveraged buyouts, (2) tight integration between CD&R’s financial and operating partners, (3) consistent and clearly-defined transaction parameters, (4) active approach to post-acquisition ownership, (5) careful crafting of capital structures, and (6) maximization of exit optionality.

Investment Strategy



23.9%1.4x

6,935,118

25,000,00017,573,054

Investment Review



$$$$$


10


Brand Energy & Infrastructure Services Industrial ServicesDec-13Mauser Group Industrial ServicesAug-14Solenis MaterialsAug-14TruGreen Holding Corporation Consumer RelatedApr-16Motor Fuel Group Industrial ServicesJul-15Drive DeVilbiss Healthcare HealthcareJan-17Tranzact Business ServicesJul-16Healogics, Inc. Medical/Health RelatedJul-14High Ridge Brands Co. Consumer RelatedJun-16Agilon Health HealthcareJul-16

Portfolio Profile


3/31/2014

6/30/2014

9/30/2014

12/31/2014

3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

18,000,000

16,000,000

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0

(2,000,000)

(4,000,000)

IRR

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

(5.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Mar-14Target termination date May-24Investment strategy BuyoutAsset Class Private Equity FundsFund Manager Clayton, Dubilier & Rice, Inc.Vintage Year 2013Fund Size 6,000,000,000% Drawn 69.6%Client % ownership 0.4%

Fund Profile


Valuation ($)

(in M

illion

s)

40

30

20

10

0



22-Aug-2017 15:43:01

A-8

Los Angeles Department of Water and Power Employees' Retirement PlanCrestview Partners III, L.P.

Crestview III implements a value-oriented investment strategy targeting investments that arise from market dislocations or through proprietary relationships. Crestview targets industries where it has internal expertise, which include media, financial services, energy and healthcare, but opportunistically transacts outside of these industries where it has a unique edge or a senior investment advisor (“Senior Advisor”) has a particular expertise. Target transactions are expected to require $100 to $400 million equity investments in companies with enterprise values of up to $2 billion.

Investment Strategy



-0.9%1.0x

252,710

50,000,00015,604,913

Investment Review



$$$$$


9


WOW! Consumer DiscretionaryDec-15JR Automation IndustrialsMar-15Accuride Financial ServicesNov-16Fidelis Insurance FinancialsJun-15Interoute Consumer DiscretionaryApr-15NYDJ Corporation Consumer DiscretionaryJan-14CP Energy EnergyNov-13W Energy Partners Oil & Gas Exploration and ProductionApr-16Arxis FinancialsNov-15

Portfolio Profile


3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0

(2,000,000)

(4,000,000)

IRR

(1.0%)(2.0%)(3.0%)(4.0%)(5.0%)(6.0%)(7.0%)(8.0%)(9.0%)(10.0%)(11.0%)(12.0%)(13.0%)(14.0%)(15.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Jan-15Target termination date Jan-25Investment strategy BuyoutAsset Class Private Equity FundsFund Manager Crestview PartnersVintage Year 2014Fund Size 3,114,845,000% Drawn 30.9%Client % ownership 1.6%

Fund Profile


Valuation ($)

(in M

illion

s)

30

25

20

15

10

5

0

Total

Dis tributions ($)


22-Aug-2017 15:43:01

A-9

Los Angeles Department of Water and Power Employees' Retirement PlanEnCap Energy Capital Fund VIII, L.P.

EnCap VIII’s investment strategy focuses on providing growth capital, typically making investments of $50 million to $200 million per transaction, on a paced and incremental basis. The EnCap investment team looks to provide growth capital to proven management teams who focus on creating value through opportunities in the United States and Canada by: acquiring and exploiting oil and gas reserves; developing low risk drilling opportunities in areas that are known to be producing and using advanced drilling and completion technologies to both conventional and non-conventional reservoirs; and implementing operational enhancement to portfolio companies.

Investment Strategy



-3.3%0.9x

6,264,340

12,500,00012,696,375

Investment Review



$$$$$


21


PennEnergy Resources, LLC Oil & Gas Exploration and ProductionSep-11Forge Energy, LLC Oil & Gas Exploration and ProductionJul-11Broad Oak Energy II, LLC Oil & Gas Exploration and ProductionJul-12Eclipse Resources, LP Oil & Gas Exploration and ProductionFeb-11FireWheel Energy, LLC Oil & Gas Exploration and ProductionAug-11Phillips Energy Partners III, LLC Oil & Gas Exploration and ProductionAug-12Tracker Resources Development III, LLC Oil & Gas Exploration and ProductionApr-11Plantation Petroleum Holdings V, LLC Oil & Gas Exploration and ProductionSep-11Payrock Energy, LLC EnergyNov-12Dorado E&P Partners, LLC Oil & Gas Exploration and ProductionJun-11

Portfolio Profile


3/31/2011

6/30/2011

9/30/2011

12/31/2011

3/31/2012

6/30/2012

9/30/2012

12/31/2012

3/31/2013

6/30/2013

9/30/2013

12/31/2013

3/31/2014

6/30/2014

9/30/2014

12/31/2014

3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

12,000,00011,000,00010,000,000

9,000,0008,000,0007,000,000

6,000,0005,000,0004,000,000

3,000,0002,000,000

1,000,0000

(1,000,000)

IRR

90.0%

80.0%

70.0%

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%

(10.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Feb-11Target termination date Oct-20Investment strategy GrowthAsset Class Private Equity FundsFund Manager EnCap InvestmentsVintage Year 2011Fund Size 3,953,200,000% Drawn 89.8%Client % ownership 0.3%

Fund Profile


Valuation ($)

(in M

illion

s)

25

20

15

10

5

0

Total

Dis tributions ($)


22-Aug-2017 15:43:02

A-10

Los Angeles Department of Water and Power Employees' Retirement PlanEnCap Energy Capital Fund IX, L.P.

EnCap IX’s investment strategy focuses on providing growth capital, typically making investments of $200 million to $300 million per transaction, on a paced and incremental basis. The EnCap investment team looks to invest growth capital with proven management teams which focus on creating value through opportunities, primarily in the United States, including the following: acquiring and exploiting oil and gas reserves, developing low risk drilling opportunities in areas that are known to be producing and using advanced drilling and completion technologies to both conventional and non-conventional reservoirs, and implementing operational enhancements to underlying portfolio companies.

Investment Strategy



20.0%1.4x

9,685,635

17,000,00016,300,788

Investment Review



$$$$$


21


Felix Energy, LLC Oil & Gas Exploration and ProductionApr-13Santa Elena Minerals, L.P. Oil & Gas Exploration and ProductionJan-15Bold Energy III, LLC Oil & Gas Exploration and ProductionApr-13Travis Peak Resources, LLC Oil & Gas Exploration and ProductionNov-13QStar LLC Oil & Gas Exploration and ProductionJun-13Silverback Exploration, LLC Oil & Gas Exploration and ProductionNov-13Protege Energy III, LLC Oil & Gas Exploration and ProductionSep-13Southland Royalty Company, LLC EnergyFeb-15Sabalo Energy, LLC Oil & Gas Exploration and ProductionMar-14Paloma Partners III, LLC Oil & Gas Exploration and ProductionJan-13

Portfolio Profile


3/31/2013

6/30/2013

9/30/2013

12/31/2013

3/31/2014

6/30/2014

9/30/2014

12/31/2014

3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0

(2,000,000)

IRR

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%(10.0%)

(20.0%)

(30.0%)

(40.0%)

(50.0%)

(60.0%)

(70.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Jan-13Target termination date Dec-22Investment strategy GrowthAsset Class Private Equity FundsFund Manager EnCap InvestmentsVintage Year 2013Fund Size 5,154,600,000% Drawn 78.1%Client % ownership 0.3%

Fund Profile


Valuation ($)

(in M

illion

s)

40

30

20

10

0



22-Aug-2017 15:43:02

A-11

Los Angeles Department of Water and Power Employees' Retirement PlanEnCap Energy Capital Fund X, L.P.

EnCap X’s investment strategy focuses on providing growth capital, typically making investments of $250 million to $400 million per transaction, on a paced and incremental basis. The EnCap investment team looks to invest growth capital with proven management teams which focus on creating value through opportunities, primarily in the United States, including the following: acquiring and exploiting oil and gas reserves, developing low risk drilling opportunities in areas that are known to be producing and using advanced drilling and completion technologies to both conventional and non-conventional reservoirs, and implementing operational enhancements to underlying portfolio companies.

Investment Strategy



25.9%1.2x

4,725,992

37,000,00014,129,761

Investment Review



$$$$$


20


Felix Energy Holdings II, LLC Oil & Gas Exploration and ProductionNov-15Plains All American Oil & Gas Master Limited PartnershipJan-16Southland Royalty Company, LLC EnergyMar-15Fortis Minerals, LLC Mineral RightsJun-16Staghorn Petroleum, LLC Oil & Gas Exploration and ProductionOct-15Scala Energy, LLC Oil & Gas Exploration and ProductionJul-15Santa Elena Minerals IV, L.P. Mineral RightsSep-16Council Oak Resources, LLC Oil & Gas Exploration and ProductionJul-15Verdun EnergyJan-16Raisa Energy II, LLC Oil & Gas Exploration and ProductionApr-16

Portfolio Profile


3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0

(2,000,000)

(4,000,000)

IRR

35.0%30.0%25.0%20.0%15.0%10.0%5.0%0.0%(5.0%)(10.0%)(15.0%)(20.0%)(25.0%)(30.0%)(35.0%)(40.0%)(45.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Mar-15Target termination date Mar-25Investment strategy GrowthAsset Class Private Equity FundsFund Manager EnCap InvestmentsVintage Year 2015Fund Size 6,500,000,000% Drawn 32.1%Client % ownership 0.6%

Fund Profile


Valuation ($)

(in M

illion

s)

30

25

20

15

10

5

0



22-Aug-2017 15:43:02

A-12

Los Angeles Department of Water and Power Employees' Retirement PlanFisher Lynch Venture Partnership II, LP

Fisher Lynch Capital invests in venture capital partnerships (10 to 15 firms) focusing on making venture capital investments primarily in information technology and life sciences companies. The targeted venture funds are based, chiefly, in the U.S. The Fund targets outstanding returns by adhering to the following objectives: investing with the leading private equity venture capital firms that have demonstrated historically successful investment performances, judicious diversification of the Fund’s portfolio, and by continuing the use of a rigorous investment process.

Investment Strategy



10.5%1.7x

10,262,595

20,000,00017,630,000

Investment Review



$$$$$


17


Lightspeed Venture Partners VIII, L.P. Venture CapitalJun-08New Enterprise Associates 13, L.P. Venture CapitalJun-08Versant Venture Capital IV, L.P. Venture CapitalJun-08U.S. Venture Partners X, L.P. Venture CapitalJun-08Austin Ventures X, L.P. Venture CapitalJun-08Charles River Partnership XIV, L.P. Venture CapitalJun-09Redpoint Ventures IV, L.P. Venture CapitalJun-10Draper Fisher Jurvetson Fund X, L.P. Venture CapitalJun-09Accel Growth Fund, L.P. Venture CapitalJun-08Khosla Ventures III, L.P. Venture CapitalJun-09

Portfolio Profile


6/30/2008

9/30/2008

12/31/2008

3/31/2009

6/30/2009

9/30/2009

12/31/2009

3/31/2010

6/30/2010

9/30/2010

12/31/2010

3/31/2011

6/30/2011

9/30/2011

12/31/2011

3/31/2012

6/30/2012

9/30/2012

12/31/2012

3/31/2013

6/30/2013

9/30/2013

12/31/2013

3/31/2014

6/30/2014

9/30/2014

12/31/2014

3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

22,000,000

20,000,000

18,000,000

16,000,000

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0

(2,000,000)

IRR

20.0%15.0%10.0%5.0%0.0%(5.0%)(10.0%)(15.0%)(20.0%)(25.0%)(30.0%)(35.0%)(40.0%)(45.0%)(50.0%)(55.0%)(60.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment May-08Target termination date Dec-19Investment strategy Fund of FundsAsset Class Private Equity FundsFund Manager Fisher Lynch CapitalVintage Year 2008Fund Size 81,799,182% Drawn 88.1%Client % ownership 24.5%

Fund Profile


Valuation ($)

(in M

illion

s)

50

40

30

20

10

0



22-Aug-2017 15:43:02

A-13

Los Angeles Department of Water and Power Employees' Retirement PlanHarvest Partners VII, L.P.

Harvest implements a investment strategy focusing primarily on control middle-market buyouts and recapitalizations of companies based in North America with: (i) annual revenues between $100 million and $1 billion; (ii) EBITDA between $20 million and $70 million; (iii) enterprise values between $100 million and $750 million; and (iv) equity investments between $50 million and $250 million. The majority of capital will be invested in Harvest core industry verticals, namely Business Services & Consumer, Healthcare Services, Industrial & Energy Services, and Manufacturing & Distribution.

Investment Strategy



-45.8%0.9x

0

30,000,0004,975,674

Investment Review



$$$$$


3


Document Technologies, LLC Business ServicesSep-16Material Handling Services Business ServicesMar-17Advanced Dermatology & Comsetic Surgery HealthcareMay-16

Portfolio Profile


9/30/2016

12/31/2016

3/31/2017

4,000,000

3,000,000

2,000,000

1,000,000

0

(1,000,000)

(2,000,000)

(3,000,000)

(4,000,000)

IRR

(30.0%)

(35.0%)

(40.0%)

(45.0%)(50.0%)

(55.0%)

(60.0%)

(65.0%)(70.0%)

(75.0%)

(80.0%)

(85.0%)(90.0%)

(95.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Jul-16Target termination dateInvestment strategy BuyoutAsset Class Private Equity FundsFund Manager Harvest Partners, L.P.Vintage Year 2016Fund Size 2,200,000,000% Drawn 16.6%Client % ownership 1.4%

Fund Profile


Valuation ($)

(in M

illion

s)

10

5

0

Total

Dis tributions ($)


22-Aug-2017 15:43:02

A-14

Los Angeles Department of Water and Power Employees' Retirement PlanHRJ Special Opportunities II, L.P.

SOF II constructed a portfolio of special opportunities fund managers who have the expertise to pursue unique transactions during periods of instability and distress, as well as having the expertise to pursue more traditional buyout related private equity transactions during more stable periods of growth. These transactions commonly include turnaround-oriented transactions and distressed investments.

Investment Strategy



7.2%1.5x

19,150,000

20,000,00017,967,579

Investment Review



$$$$$


9


Fortress Investment Fund V, L.P. Distressed/Special SituationsMay-07Sun Capital Partners V, L.P. BuyoutMar-07H.I.G. Bayside Debt & LBO Fund II, L.P. Distressed/Special SituationsMay-08Wayzata Opportunities Fund II, L.P. Distressed/Special SituationsMay-08Wexford Partners 11, L.P. Distressed/Special SituationsAug-07Fortress Investment Fund V Co-Investment, L.P. Distressed/Special SituationsMay-07OCM Opportunities Fund VIIb, L.P. Distressed/Special SituationsMay-07OCM Opportunities Fund VII, L.P. Distressed/Special SituationsMay-07Avenue Special Situations Fund V, L.P. Distressed/Special SituationsMay-07

Portfolio Profile


3/31/2008

6/30/2008

9/30/2008

12/31/2008

3/31/2009

6/30/2009

9/30/2009

12/31/20093/31/2010

6/30/2010

9/30/2010

12/31/2010

3/31/2011

6/30/2011

9/30/2011

12/31/2011

3/31/20126/30/2012

9/30/2012

12/31/2012

3/31/2013

6/30/2013

9/30/2013

12/31/2013

3/31/2014

6/30/2014

9/30/2014

12/31/20143/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

20,000,00018,000,00016,000,00014,000,00012,000,00010,000,000

8,000,0006,000,0004,000,0002,000,000

0(2,000,000)(4,000,000)(6,000,000)(8,000,000)

(10,000,000)

IRR

10.0%

5.0%

0.0%

(5.0%)

(10.0%)

(15.0%)

(20.0%)

(25.0%)

(30.0%)

(35.0%)

(40.0%)

(45.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Mar-08Target termination date Dec-19Investment strategy Fund of FundsAsset Class Private Equity FundsFund Manager Capital DynamicsVintage Year 2007Fund Size 153,976,916% Drawn 76.3%Client % ownership 13.0%

Fund Profile


Valuation ($)

(in M

illion

s)

50

40

30

20

10

0



22-Aug-2017 15:43:02

A-15

Los Angeles Department of Water and Power Employees' Retirement PlanIndustry Ventures Secondary VIII, L.P.

Industry Ventures will target venture capital investments across a spectrum of secondary transactions including: limited partnership interests, secondary directs, and special situation transactions. The strategy will focus on making 20 to 40 investments of less than $25 million in sector-leading venture backed companies with revenues of $20-$200 million and 10 to 20 limited partnership interests, as well as some direct portfolios and special situation investments.

Investment Strategy

Original CommitmentAmount ContributedDistributionsReported Value 480,200


6.7%1.1x

0

37,500,000450,000

Investment Review



$$$$$



Brookside Capital Partners Fund, L.P. Venture CapitalMar-17DCM IV, L.P. Venture CapitalMar-17ExtraHop Networks, Inc. Information TechnologyMar-17

Portfolio Profile


3/31/2017500,000

400,000

300,000

200,000

100,000

0

(100,000)

(200,000)

(300,000)

(400,000)

IRR6.7%

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Feb-17Target termination dateInvestment strategy SecondariesAsset Class Private Equity FundsFund Manager Industry VenturesVintage Year 2017Fund Size 512,704,682% Drawn 1.2%Client % ownership 7.3%

Fund Profile


Valuation ($)

(in M

illion

s)

10

5

0

Total

Dis tributions ($)


22-Aug-2017 15:43:02

A-16

Los Angeles Department of Water and Power Employees' Retirement PlanLandmark Equity Partners XIII, L.P.

Landmark XIII was formed to acquire interests in established private equity investments through secondary market transactions. The Partnership constructed a diversified portfolio of private equity interests with the objectives of achieving superior returns at lower risk for this asset class and generating cash distributions to its partners beginning in the Partnership’s first year.

Investment Strategy



5.2%1.3x

27,828,918

30,000,00028,798,328

Investment Review



$$$$$


91


Royalty Pharma US Partners I, L.P. ExpansionJun-97Thomas H. Lee Equity Fund VI, L.P. BuyoutJun-06Psilos Group Partners II SBIC, L.P. BuyoutJun-02Vision Capital Partners VI, L.P. BuyoutJun-06Hunt Ventures Fund I, L.P. Venture CapitalJun-04MP II Preferred Partners, L.P. Distressed/Special SituationsJun-08Apple Tree Partners II BuyoutJun-00Landmark Portfolio Advisors Fund I, LLC DiversifiedJun-06Friedman Fleisher & Lowe Capital Partners III BuyoutJun-08Oak Hill Capital Partners III BuyoutJun-07

Portfolio Profile


12/31/20063/31/20076/30/20079/30/200712/31/20073/31/20086/30/20089/30/200812/31/20083/31/20096/30/20099/30/200912/31/20093/31/20106/30/20109/30/201012/31/20103/31/20116/30/20119/30/201112/31/20113/31/20126/30/20129/30/201212/31/20123/31/20136/30/20139/30/201312/31/20133/31/20146/30/20149/30/201412/31/20143/31/20156/30/20159/30/201512/31/20153/31/20166/30/20169/30/201612/31/20163/31/2017

18,000,000

16,000,00014,000,000

12,000,00010,000,000

8,000,0006,000,000

4,000,0002,000,000

0

(2,000,000)(4,000,000)

(6,000,000)(8,000,000)

IRR

26.0%24.0%22.0%20.0%18.0%16.0%14.0%12.0%10.0%8.0%6.0%4.0%2.0%0.0%(2.0%)(4.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Nov-06Target termination date Nov-19Investment strategy SecondariesAsset Class Private Equity FundsFund Manager Landmark Partners, Inc.Vintage Year 2006Fund Size 1,194,454,545% Drawn 96.0%Client % ownership 2.5%

Fund Profile


Valuation ($)

(in M

illion

s)

60

50

40

30

20

10

0



22-Aug-2017 15:43:03

A-17

Los Angeles Department of Water and Power Employees' Retirement PlanLandmark Equity Partners XIV, L.P.

Landmark XIV was formed to acquire interests in established private equity investments through secondary market transactions. The Partnership constructed a diversified portfolio of private equity interests with the objectives of achieving superior returns at lower risk for this asset class and generating cash distributions to its partners beginning in the Partnership’s first year.

Investment Strategy



10.2%1.3x

24,844,605

30,000,00028,130,798

Investment Review



$$$$$

Total Number of Portfolio Companies88%239


LAF IV Colony, L.P. DiversifiedJun-10Landmark Acquisition Fund VI, L.P. DiversifiedJun-13WS Gatsby Partners, L.P. BuyoutJun-12TCL Aventura, L.P. DiversifiedJun-11TDR Capital II A, L.P. BuyoutJun-06HL Investments, L.P. DiversifiedJun-11Ridgemont Equity Partners I, LP BuyoutJun-12Landmark Aquisition Fund III, L.P. DiversifiedJun-09Vision Capital Partners VII, L.P. (C) BuyoutJan-09Delta-V Capital Access Fund, L.P. Venture CapitalJun-13

Portfolio Profile


9/30/2008

12/31/2008

3/31/2009

6/30/2009

9/30/2009

12/31/2009

3/31/2010

6/30/2010

9/30/2010

12/31/2010

3/31/2011

6/30/2011

9/30/2011

12/31/2011

3/31/2012

6/30/2012

9/30/2012

12/31/2012

3/31/2013

6/30/2013

9/30/2013

12/31/2013

3/31/2014

6/30/2014

9/30/2014

12/31/2014

3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

20,000,000

18,000,000

16,000,000

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0

(2,000,000)

(4,000,000)

IRR

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

(5.0%)

(10.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Sep-08Target termination date Feb-24Investment strategy SecondariesAsset Class Private Equity FundsFund Manager Landmark Partners, Inc.Vintage Year 2008Fund Size 1,997,242,424% Drawn 94.1%Client % ownership 1.5%

Fund Profile


Valuation ($)

(in M

illion

s)

60

50

40

30

20

10

0



22-Aug-2017 15:43:03

A-18

Los Angeles Department of Water and Power Employees' Retirement PlanLandmark Equity Partners XV, L.P.

Landmark XV was formed to acquire interests in established private equity investments through secondary market transactions. The Partnership constructed a diversified portfolio of private equity interests with the objectives of achieving superior returns at lower risk for this asset class and generating cash distributions to its partners beginning in the Partnership’s first year.

Investment Strategy



12.4%1.2x

7,714,179

40,000,00017,731,978

Investment Review



$$$$$

Total Number of Portfolio Companies44%162


LEP XV Holdings, L.P. DiversifiedMar-15Landmark Acquisition Fund VI, L.P. DiversifiedJun-13Landmark Acquisition Fund VIII DiversifiedJun-14Landmark Acquisition Fund VII, L.P. DiversifiedJun-14Landmark Acquisition Fund IX, L.P. DiversifiedJun-16Landmark Acquisition Fund X, L.P. DiversifiedJun-16TDR II Holdings, L.P. BuyoutJun-16Ares Corporate Opportunities Fund IV BuyoutJun-14TDR Capital II C, L.P. BuyoutMay-15Fortress Investment Fund III, L.P. BuyoutJun-04

Portfolio Profile


3/31/2014

6/30/2014

9/30/2014

12/31/2014

3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0

(2,000,000)

(4,000,000)

IRR

40.0%38.0%36.0%34.0%32.0%30.0%28.0%26.0%24.0%22.0%20.0%18.0%16.0%14.0%12.0%

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Mar-14Target termination date Apr-28Investment strategy SecondariesAsset Class Private Equity FundsFund Manager Landmark Partners, Inc.Vintage Year 2013Fund Size 3,250,000,000% Drawn 44.5%Client % ownership 1.2%

Fund Profile


Valuation ($)

(in M

illion

s)

40

30

20

10

0



22-Aug-2017 15:43:03

A-19

Los Angeles Department of Water and Power Employees' Retirement PlanLexington Capital Partners VI Holdings, L.P.

Lexington VI acquires interests in established leveraged buyout, venture capital, and mezzanine funds, primarily in secondary transactions. The Partnership created a diversified portfolio of private equity partnership interests with the expectation of achieving superior returns at a well-diversified level of risk while generating cash distributions beginning in the Partnership’s first year.

Investment Strategy



6.8%1.4x

36,014,403

30,000,00031,860,385

Investment Review

Remaining to be invested 490,410Age of fund (in years) 10.8


$$$$$


420


KKR & Co. L.P. BuyoutJun-07ZM Private Equity Fund I, L.P. DiversifiedJun-07Thomas H. Lee Equity Fund VI, L.P. BuyoutJun-06Azini Fund IA Direct SecondariesJun-07Azini Fund II Direct SecondariesJun-10Vestar Capital Partners V, L.P. BuyoutJun-05Lindsay Goldberg & Bessemer II, L.P. BuyoutJun-062007 Co-Investment Portfolio, L.P. DiversifiedJun-07Saints Capital Chamonix, L.P. DiversifiedJun-01American Capital Equity I, LLC BuyoutJun-02

Portfolio Profile


6/30/20069/30/200612/31/20063/31/20076/30/20079/30/200712/31/20073/31/20086/30/20089/30/200812/31/20083/31/20096/30/20099/30/200912/31/20093/31/20106/30/20109/30/201012/31/20103/31/20116/30/20119/30/201112/31/20113/31/20126/30/20129/30/201212/31/20123/31/20136/30/20139/30/201312/31/20133/31/20146/30/20149/30/201412/31/20143/31/20156/30/20159/30/201512/31/20153/31/20166/30/20169/30/201612/31/20163/31/2017

22,000,000

20,000,00018,000,000

16,000,000

14,000,00012,000,000

10,000,000

8,000,0006,000,000

4,000,0002,000,000

0

(2,000,000)(4,000,000)

IRR

18.0%16.0%14.0%12.0%10.0%8.0%6.0%4.0%2.0%0.0%(2.0%)(4.0%)(6.0%)(8.0%)(10.0%)(12.0%)(14.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Jun-06Target termination date Aug-15Investment strategy SecondariesAsset Class Private Equity FundsFund Manager Lexington Partners, Inc.Vintage Year 2006Fund Size 3,773,870,707% Drawn 98.4%Client % ownership 0.8%

Fund Profile


Valuation ($)

(in M

illion

s)

80

60

40

20

0



22-Aug-2017 15:43:03

A-20

Los Angeles Department of Water and Power Employees' Retirement PlanLexington Capital Partners VII, L.P.

Lexington VII acquires interests in established leveraged buyout, venture capital and mezzanine funds through secondary market transactions. The Partnership is expected to assemble a diversified portfolio of private equity partnership interests with the expectation of achieving superior returns at a well-diversified level of risk while generating cash distributions back to investors early in the partnership's life cycle.

Investment Strategy



14.8%1.5x

26,574,182

30,000,00025,951,534

Investment Review



$$$$$


603


2007 Co-Investment Portfolio, L.P. DiversifiedJun-07KKR/Lexington Co-Investments DiversifiedJun-11Lexington Private Equity VI, L.P. DiversifiedJun-15Providence Equity Partners VI, L.P. BuyoutJun-07Lexington Private Equity IV, L.P. DiversifiedJun-06TPG Partners VI, L.P. BuyoutJun-08Lexington Private Equity V, L.P. DiversifiedJun-06Rosetta Capital V, L.P. BuyoutJun-15Warburg Pincus Private Equity X, L.P. BuyoutJun-07Metalmark Capital Partners II, L.P. BuyoutJun-08

Portfolio Profile


12/31/2009

3/31/2010

6/30/2010

9/30/2010

12/31/2010

3/31/2011

6/30/2011

9/30/2011

12/31/2011

3/31/2012

6/30/2012

9/30/2012

12/31/2012

3/31/2013

6/30/2013

9/30/2013

12/31/2013

3/31/2014

6/30/2014

9/30/2014

12/31/2014

3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

20,000,00018,000,00016,000,000

14,000,00012,000,00010,000,000

8,000,0006,000,0004,000,000

2,000,0000

(2,000,000)

(4,000,000)(6,000,000)

IRR

160.0%

140.0%

120.0%

100.0%

80.0%

60.0%

40.0%

20.0%

0.0%

(20.0%)

(40.0%)

(60.0%)

(80.0%)

(100.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Dec-09Target termination date Jun-21Investment strategy SecondariesAsset Class Private Equity FundsFund Manager Lexington Partners, Inc.Vintage Year 2009Fund Size 6,099,106,061% Drawn 79.8%Client % ownership 0.5%

Fund Profile


Valuation ($)

(in M

illion

s)

60

50

40

30

20

10

0



22-Aug-2017 15:43:03

A-21

Los Angeles Department of Water and Power Employees' Retirement PlanOaktree Principal Fund V, L.P.

The Fund is implementing a distress-for-control investment strategy that generally involves purchasing one or more classes of a target company’s debt, at a discount, in anticipation of a financial restructuring that will allow the exchange of debt for a controlling ownership stake at an attractive valuation. In these situations, the Fund attempts to become the largest, or one of the largest, creditors of the target company, seeking at a minimum a blocking position in the fulcrum security in order to exert negative control during the restructuring process.

Investment Strategy



3.6%1.2x

9,176,182

16,000,00015,065,861

Investment Review



$$$$$


19


Agro Merchants ServicesSep-13Quicksilver Apparel, Accessories & Luxury GoodsSep-14Caerus Oil & Gas, LLC Oil & Gas Exploration and ProductionDec-09Billabong International Retailing RelatedNov-13Dayco LLC Motor Vehicles, Transporation Equipment & PartsAug-09First BanCorp Financial ServicesOct-11Floatel International Limited Energy RelatedFeb-12HW Topco, Inc Media Related ServicesMar-11Townsquare Media Radio & TV Broadcasting StationsFeb-10General Maritime Corporation Other TransportationMay-11

Portfolio Profile


3/31/2009

6/30/2009

9/30/2009

12/31/2009

3/31/2010

6/30/2010

9/30/2010

12/31/2010

3/31/2011

6/30/2011

9/30/2011

12/31/2011

3/31/2012

6/30/2012

9/30/2012

12/31/2012

3/31/2013

6/30/2013

9/30/2013

12/31/2013

3/31/2014

6/30/2014

9/30/2014

12/31/2014

3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

13,000,00012,000,00011,000,00010,000,000

9,000,0008,000,0007,000,0006,000,0005,000,0004,000,0003,000,0002,000,0001,000,000

0(1,000,000)(2,000,000)

IRR

35.0%

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Feb-09Target termination date Feb-19Investment strategy Debt RelatedAsset Class Private Equity FundsFund Manager Oaktree Capital Management LLCVintage Year 2009Fund Size 2,755,860,000% Drawn 89.0%Client % ownership 0.6%

Fund Profile


Valuation ($)

(in M

illion

s)

30

25

20

15

10

5

0



22-Aug-2017 15:43:03

A-22

Los Angeles Department of Water and Power Employees' Retirement PlanSilver Lake Partners IV, L.P.

Silver Lake Partners’ investment strategy is to (i) apply its technology expertise; (ii) leverage its global relationship network; (iii) focus on market leaders with transformational opportunities; (iv) invest in companies with exceptional growth prospects; (v) utilize creative investment structures and formats; and (vi) partner with its management teams to implement value creation initiatives. Silver Lake will focus primarily on technology companies with enterprise values of $500 million or more. The Fund expects to invest approximately $200 million to $1 billion or more of Fund capital per transaction.

Investment Strategy



31.5%1.5x

5,950,628

18,000,00013,505,406

Investment Review



$$$$$


16


Dell, Inc. Hardware & IT InfrastructureOct-13Symantec Information TechnologyMar-16SolarWinds Holdings, Inc. Information TechnologyFeb-16Motorola Solutions, Inc. CommunicationsAug-15Cast & Crew Entertainment Services Business ServicesAug-15Ancestry DNA TestingMay-16UFC MediaAug-16Fanatics Holdings, Inc eCommerceSep-15Red Ventures Holdco Venture CapitalOct-14Avago Technologies, Ltd. SemiconductorsMay-14

Portfolio Profile


12/31/2013

3/31/2014

6/30/2014

9/30/2014

12/31/2014

3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

14,000,00013,000,00012,000,00011,000,00010,000,000

9,000,0008,000,0007,000,0006,000,0005,000,0004,000,0003,000,0002,000,0001,000,000

0(1,000,000)(2,000,000)

IRR

70.0%

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%

(10.0%)

(20.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Oct-13Target termination date Jun-23Investment strategy BuyoutAsset Class Private Equity FundsFund Manager Silver Lake PartnersVintage Year 2013Fund Size 10,263,000,000% Drawn 67.5%Client % ownership 0.2%

Fund Profile


Valuation ($)

(in M

illion

s)

30

25

20

15

10

5

0



22-Aug-2017 15:43:04

A-23

Los Angeles Department of Water and Power Employees' Retirement PlanVista Equity Partners IV, L.P.

Vista Equity Partners (VEP) focuses on making control-oriented investments in middle-market companies that specialize in providing enterprise software and that have considerable opportunities for generating additional value. Target companies will have enterprise values of $100.0 million to $1.0 billion. These targeted transactions must have some aspect on which VEP believes material operational change can be enacted and then translated into outsized investment returns.

Investment Strategy



20.1%1.9x

13,596,054

25,000,00024,445,906

Investment Review



$$$$$


8


Misys Limited Information TechnologyJan-12Cvent (fka: Active Networks) Information TechnologyNov-13Omnitracs Information TechnologyOct-13Greenway HealthcareNov-11Vivid Seats Information TechnologyFeb-16STATS Information TechnologyJun-14Aptean Information TechnologyApr-12Sovos Compliance Information TechnologyDec-12

Portfolio Profile


12/31/2011

3/31/2012

6/30/2012

9/30/2012

12/31/2012

3/31/2013

6/30/2013

9/30/2013

12/31/2013

3/31/2014

6/30/2014

9/30/2014

12/31/2014

3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

30,000,000

25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

0

(5,000,000)

IRR

20.0%

15.0%

10.0%

5.0%

0.0%

(5.0%)

(10.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Nov-11Target termination date Mar-22Investment strategy BuyoutAsset Class Private Equity FundsFund Manager Vista Equity PartnersVintage Year 2011Fund Size 3,069,540,817% Drawn 89.4%Client % ownership 0.8%

Fund Profile


Valuation ($)

(in M

illion

s)

80

60

40

20

0



22-Aug-2017 15:43:04

A-24

Los Angeles Department of Water and Power Employees' Retirement PlanVista Equity Partners V, L.P.

Vista Equity Partners (VEP) focuses on making control-oriented investments in middle-market companies that specialize in providing enterprise software and that have considerable opportunities for generating additional value. Target companies will have enterprise values of $100.0 million to $1.0 billion. These targeted transactions must have some aspect on which VEP believes material operational change can be enacted and then translated into outsized investment returns.

Investment Strategy



10.4%1.2x

9,259,423

50,000,00049,919,825

Investment Review

Remaining to be invested 61,748Age of fund (in years) 2.9


$$$$$


12


TIBCO Software, Inc. Information TechnologyDec-14Solera Information TechnologyFeb-16EagleView Technology Corporation Information TechnologyJul-15MediaOcean Information TechnologyAug-15Marketo Information TechnologyAug-16Advanced Computer Software Group, plc Information TechnologyMar-15DelaerSocket Information TechnologyMay-14NAVEX Information TechnologyNov-14Forcepoint Information TechnologyMay-15Vivid Seats Information TechnologyFeb-16

Portfolio Profile


3/31/2014

6/30/2014

9/30/2014

12/31/2014

3/31/2015

6/30/2015

9/30/2015

12/31/2015

3/31/2016

6/30/2016

9/30/2016

12/31/2016

3/31/2017

50,000,000

45,000,000

40,000,000

35,000,000

30,000,000

25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

0

(5,000,000)

(10,000,000)

(15,000,000)

IRR

15.0%

10.0%

5.0%

0.0%

(5.0%)

(10.0%)

(15.0%)

(20.0%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment May-14Target termination date Oct-24Investment strategy BuyoutAsset Class Private Equity FundsFund Manager Vista Equity PartnersVintage Year 2014Fund Size 6,200,000,000% Drawn 99.9%Client % ownership 0.8%

Fund Profile


Valuation ($)

(in M

illion

s)

100

80

60

40

20

0



22-Aug-2017 15:43:04

A-25

Los Angeles Department of Water and Power Employees' Retirement PlanVista Equity Partners VI, L.P.

Vista Equity Partners (VEP) focuses on making control-oriented investments in upper middle-market companies that specialize in providing enterprise software and that have considerable opportunities for generating additional value. Target companies will have enterprise values of $400.0 million to $5.0 billion. These targeted transactions must have some aspect on which VEP believes material operational change can be enacted and then translated into outsized investment returns.

Investment Strategy



-2.2%1.0x

0

60,000,00022,439,168

Investment Review



$$$$$


6


Cvent Information TechnologyNov-16Marketo Information TechnologyMar-16Infoblox Inc. Information TechnologyMar-16Vertafore Information TechnologyJun-16Ping Identity Information TechnologyJun-16Superion Information TechnologyFeb-17

Portfolio Profile


6/30/2016

9/30/2016

12/31/2016

3/31/2017

22,000,00020,000,00018,000,00016,000,00014,000,00012,000,00010,000,000

8,000,0006,000,0004,000,0002,000,000

0(2,000,000)(4,000,000)(6,000,000)(8,000,000)

IRR

1.0%0.8%0.6%0.4%0.2%0.0%(0.2%)(0.4%)(0.6%)(0.8%)(1.0%)(1.2%)(1.4%)(1.6%)(1.8%)(2.0%)(2.2%)

Portfolio Cash Flows - Valuations - IRR PerformanceClient Initial Investment Apr-16Target termination dateInvestment strategy BuyoutAsset Class Private Equity FundsFund Manager Vista Equity PartnersVintage Year 2016Fund Size 8,979,000,000% Drawn 37.5%Client % ownership 0.7%

Fund Profile


Valuation ($)

(in M

illion

s)

30

25

20

15

10

5

0

Total

Dis tributions ($)


22-Aug-2017 15:43:04

A-26

WPERP Private Equity Performance Report – 1Q2017

HEALTH FUND PRIVATE EQUITY PROGRAM OVERVIEW

As of March 31, 2017, the Program had $149.5 million in commitments across 21 partnerships generating a net sinceinception IRR of 11.5%, up from 11.4% last quarter and 9.7% one year prior. Recovery from prior declines in some oil & gasholdings and distressed debt securities, contributed to recent performance improvements. However, material contributionactivity (29% of current market value) continues to be a slight drag on recent results as underlying investments are initiallyheld at cost. The Program’s reported value represented 3.3% of total Plan assets as of Q1 2017. WPERP’s current targetallocation to private equity is 5% (an increase to 8% over the long-term was approved in September of 2015 by the Board).Including unfunded commitments of $82.1 million results in an approximate allocation of 7.7% on a total exposure basis(market value plus unfunded commitments). Subsequent to the reporting period, an additional $56.0 million of commitmentshave closed or been approved, but had yet to begin deploying capital, bringing the approximate allocation to 10.8% on atotal exposure basis. Continued commitment activity is required to achieve the target allocation on a market value basis.

One-Year Three-Year Five-Year Since InceptionWPERP Private Equity 15.9% 10.8% 11.1% 11.5%Russell 3000 + 300 bps 21.4% 13.0% 14.7% 15.1%

Variance (5.5%) (2.2%) (3.6%) (3.6%)

* initial capital call was on September 19, 2008

The WPERP Health Fund private equity portfolio underperformed the policy benchmark (Russell 3000 Index plus 300 basispoints) over all periods evaluated. The continued strong performance of the public equity markets contributed to theunderperformance as public equity has generated returns well above long-term expectations while private markets’appreciation has not kept pace. Given this dynamic, public equity index plus a premium benchmarks have been difficult tooutperform over recent periods. Relative to the broad private equity market (as represented by the Cambridge AssociatesHorizon Summary Report provided on page 16 of this report), the Health Fund private equity portfolio outperformed thebroad private equity market over all periods evaluated, except for the latest five-year period.

WPERP Health Fund Private Equity Performance vs. Policy Benchmark as of March 31, 2017

WPERP Health Fund Private Equity Program – one-year change as of March 31, 2017($ Millions)

Committed Contributed Distributed Market Value% of Total

AssetsTarget PE

Allocation MultipleSince Inception

IRR*Beginning of Period $99.0 $54.2 $17.1 $45.8 2.7% 5.0% 1.2x 9.7%End of Period $149.5 $72.1 $27.5 $61.2 3.3% 5.0% 1.2x 11.5%

Change $50.5 $17.9 $10.4 $15.4 0.6% 0.0% --- 1.8%

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I t tI t t S tt ib ti tt d V lt t M ll I t tA (Y )D t ($)itt d ($)N t IRRi i U f dl E ($) All P tf li I t tlti l f C P i t E it T ki S h d l3/31/2017G BG BG B L A l DLos Angeles Department of Water and Power Retiree Health Benefits Fund

Private Equity Tracking Schedule

Investments

Total Capital Committed ($)

ReportedValue ($)

ActualContributionto Date* ($)

InvestmentSector

RemainingUnfunded ($)

Date ofInitialInvestment

NetIRR

TotalDistributionto Date ($)

TotalExposure ($) Multiple3/31/2017

As of:

Landmark Equity Partners XIV, L.P. Secondaries Sep-08 5,000,000 4,703,293 296,707 4,140,769 1,974,470 2,271,177 1.3x 10.2%Oaktree Principal Fund V, L.P. Debt Related Feb-09 2,500,000 2,349,802 275,198 1,433,476 1,277,536 1,552,734 1.2x 3.6%Lexington Capital Partners VII, L.P. Secondaries Dec-09 5,000,000 4,336,811 1,012,260 4,428,990 2,100,632 3,112,892 1.5x 14.8%Audax Mezzanine Fund III, L.P. Debt Related Feb-11 3,000,000 2,647,795 352,205 1,768,749 1,544,550 1,896,755 1.3x 9.6%EnCap Energy Capital Fund VIII, L.P. Growth Feb-11 2,500,000 2,538,673 254,866 1,252,868 1,090,231 1,345,097 0.9x -3.3%Vista Equity Partners IV, L.P. Buyout Nov-11 5,000,000 4,894,087 531,436 2,719,212 6,413,434 6,944,870 1.9x 20.1%Ares Corporate Opportunities Fund IV, L.P. Buyout Nov-12 5,000,000 4,543,640 1,263,776 1,260,347 4,925,644 6,189,420 1.4x 15.2%EnCap Energy Capital Fund IX, L.P. Growth Jan-13 3,000,000 2,876,610 567,573 1,709,230 2,201,789 2,769,361 1.4x 20.0%Silver Lake Partners IV, L.P. Buyout Oct-13 3,000,000 2,250,901 975,392 991,770 2,333,140 3,308,532 1.5x 31.5%Apollo Investment Fund VIII Buyout Feb-14 6,000,000 4,249,384 2,382,484 813,164 4,111,327 6,493,811 1.2x 13.2%Landmark Equity Partners XV, L.P. Secondaries Mar-14 7,000,000 3,112,983 3,887,017 1,349,973 2,347,841 6,234,858 1.2x 12.4%Clayton, Dubilier & Rice Fund IX, L.P. Buyout Mar-14 5,000,000 3,497,158 1,517,805 1,387,026 3,525,042 5,042,847 1.4x 23.9%Vista Equity Partners V, L.P. Buyout May-14 10,000,000 9,987,648 12,352 1,851,885 9,792,972 9,805,324 1.2x 10.4%Crestview Partners III, L.P. Buyout Jan-15 10,000,000 3,120,982 6,906,546 50,543 3,032,460 9,939,006 1.0x -0.9%Ares Special Situations Fund IV, L.P. Debt Related Feb-15 10,000,000 3,778,765 7,023,102 807,735 1,896,745 8,919,847 0.7x -18.9%EnCap Energy Capital Fund X, L.P. Growth Mar-15 7,000,000 2,673,199 4,752,505 894,107 2,322,471 7,074,976 1.2x 25.8%Blackstone Tactical Opportunities Fund II, L.P.Debt Related May-15 10,000,000 4,706,970 5,436,306 615,042 4,737,613 10,173,919 1.1x 11.6%Vista Equity Partners VI, L.P. Buyout Apr-16 12,000,000 4,505,265 7,494,735 0 4,413,289 11,908,024 1.0x -2.2%Harvest Partners VII, L.P. Buyout Jul-16 6,000,000 995,135 5,004,865 0 886,853 5,891,718 0.9x -45.8%Adams Street Global SMB WPERP Fund L.P. Buyout Feb-17 25,000,000 237,500 24,762,500 0 199,310 24,961,810 0.8x -16.1%Industry Ventures Secondary VIII, L.P. Secondaries Feb-17 7,500,000 90,000 7,410,000 0 96,040 7,506,040 1.1x 6.7%

$72,096,601 $82,119,629 $61,223,388 $143,343,017$149,500,000 $27,474,885 11.5%1.2xTotal Portfolio

All TotalAllAll

* May exceed committed capital due to recycling of recallable distributions.

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1q2017 - los angeles department of water and power · 13/09/2017 · wperp private equity...

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