Saturday, February 13, 2016

LLR 2: Lubert fund now in the black

Turns $25 million into $34 million, so far

LLR 2: Lubert fund now in the black

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In this item last week, I posted returns (reported by Pennsylvania state workers' and state teachers' pension funds, SERS and PSERS, to the General Assembly in their most recent annual reports) for the four LLR buyout funds set up by Philadelphia investor Ira Lubert and his partners, who together invest somewhere north of $10 billion, including more than $1 billion in Pennsylvania state money.

In those reports, the original 2000 LLR Equity Partners fund had more than doubled investors' money, but the other three LLR funds, started in 2004, 2008 and 2012, had yet to return the pension funds' principal (which can take years, for buyout funds and other privately-run, illiquid investments). 

SERS spokeswoman Pamela Hile has since given me an update, which she says includes the most recent data at midyear 2013. This shows LLR Equity Partners II, which won a $25 million commitment from SERS eight years ago, has returned an additional $12.5 million since the annual report I cited, and is now in the black, having returned a total of $34.1 million on the original $25 million investment.

Every million is welcome for the fund, which has struggled to keep its assets in line with payments to the state's growing list of retirees. Is 8 years too long to wait to make $9 on $25? And are there more profits in the LLR II pipeline? Private equity is for patient money. 

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PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, 215.854.5194, @PhillyJoeD. Read his blog posts at http://www.philly.com/PhillyDeals and his Inquirer columns at http://www.philly.com/philly/columnists/joseph-distefano/. Bloomberg posts his items at NH BLG_PHILLYDEAL.

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