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Kansas selects LP Capitol as gatekeeper

LP Capital, a California-based firm that is also one of CalPERS’ advisors, beat out StepStone to replace Portfolio Advisors as the US pension’s private equity gatekeeper.

The $14.1 billion Kansas Public Employees Retirement System (KPERS) has hired LP Capital Advisors to oversee its private equity programme, which has a five percent allocation target.

The pension was choosing between Sacramento, California-based LP Capital Advisors, founded by Donn Cox in 2004, and La Jolla, California-based StepStone Group, founded by several former Pacific Corporate Group senior executives in 2007. LP Capital advises investors including The California Public Employees' Retirement System while StepStone's clients include the Kuwait Investment Authority.

LP Capital effectively replaces Portfolio Advisors as the retirement plan’s private equity advisor; its general consultant is Pension Consulting Alliance.

The moves comes at the same time KPERS said it had committed $35 million (€22.4 million) to Richard Ellis’ latest real estate vehicle, Richard Ellis Strategic Partners V, a $1 billion US diversified fund. However the pension said on its website it was also redeeming its existing investments in RREEF’s value-add America III fund. KPERS were unavailable for comment at the time of publication.

The Kansas pension, which represents 250,000 state employees, had 3.1 percent committed to private equity as of 30 June 30 2007. According to its annual report, the asset class returned 23.4 percent for the fiscal year, exceeding its benchmark of 17.1 percent.

The real estate portfolio, which includes core and non-core assets, returned 20.9 percent for the fiscal year. The Kansas pension has a target allocation to real estate of 8 percent, with 7.3 percent committed as of 30 June 2007.The $14.1 billion Kansas retirement plan