To: LACERA Secondary Advisor RFP Respondents

From: Christopher Wagner

Principal Investment Officer – Private Equity

In Re: Responses to Respondents’ RFP Questions

Date: February 15, 2018

As stated in the LACERA Secondary Advisor Request for Proposal (“RFP”), LACERA is hereby providing responses to all 24 questions submitted by the 13 firms that completed “Intent to Respond” notices by the February 5, 2018 at 3:00 PM PST deadline.

1. Please provide information on the contemplated portfolio, including the following: - 12/31/17 net asset value - Unfunded commitment - Original commitment - Realized value - Vintage year - Manager

A. Refer to Worksheets 1-3 in the Excel attachment. Manager level detail will be provided in later stages of RFP process.

2. Please provide guidance on whether a deferral or other alternative pricing structure would be considered in a potential secondary transaction.

A. LACERA is not constrained by timing or liquidity needs in this exploration of a sale. Accordingly, LACERA is not averse to flexibility in a sales structure that produces a superior outcome. Hence, LACERA would consider a deferral or other alternative pricing structure.

3. Please provide any insight into pricing expectations and if there are any positions that must be sold in the process (vs. “would like to sell”)

A. LACERA is not under duress or mandate to sell any specific limited partnership interests.

4. Considering that this portfolio consists of managers who are no longer part of LACERA’s core strategy, can you provide any insight at a high level into why these managers are no longer “core” and what types of managers are in your core strategy?

A. LACERA began investing in private equity partnerships in 1986 and has rarely sold interests in the secondary marketplace. The $5 billion portfolio is diversified across strategies, managers, geographies and sectors. While we seek to be serial investors with all of our general partners, both limited partners and general partners evolve. Strategies change. Professionals move on. Macro-economic events transpire. Regulatory change intervenes. Supply and demand imbalances create terms misalignments. Currently, LACERA has about 60-75 high-conviction core managers with whom we seek to deepen ongoing relationships. Core managers excel executing diverse strategies across many geographies. Managers whose most recent funds we did not re-up in are potential sale candidates.

5. Please provide insight into preferred transaction process timeline (once the selection is announced)

A. LACERA anticipates a sales process will commence in Q3/18 leading to interests being sold by the end of 2018.

6. In connection with Attachment B, we would like to request LACERA to grant an exception to the minimum qualification certification, as we are unable to attest to the certification.

A. If your firm is unable to attest to the certification, and you elect to proceed, please indicate “No” on Attachment B and discuss the qualifications you fail to meet.

7. In connection with Attachment C, due to our history and geographical presence, it will be challenging to provide all requested information within the page limit. More importantly, we would like to focus on providing information as it relates to our capabilities, experience and scope of services for this advisory role. For the purpose of this RFP, we propose to include an overview of the firm and provide more information upon further request through our compliance department.

A. Responses to the enclosed Questionnaire (Attachment C) should be limited to 12 pages, excluding the cover letter, table of contents, and requested Exhibits, and be in the prescribed format. LACERA will review the materials submitted by Respondents. As stated in the RFP, LACERA reserves the right to reject, in whole or in part, any and all proposals received; to waive minor irregularities; to negotiate in any manner necessary to best serve the public interest, and to make a whole award, multiple awards, a partial award, or no award.

8. Is LACERA planning on hiring multiple advisors or will this be a sole mandate?

A. It is anticipated, though not guaranteed, that LACERA’s Board of Investments will approve multiple Secondary Advisors to work with LACERA going forward, while designating one Advisor as the sole consultant on the upcoming sale. Any approved Secondary Advisors could be engaged by LACERA for future purchases or sales of limited partnership interests.

9. Will the advisor selected as part of this RFP process be mandated on multiple transactions for LACERA or will a new RFP process be exercised for each contemplated transaction?

10. In the event that our firm does not meet the aforementioned Minimum Qualification Certification (Appendix B) standards, can you confirm that you will grant an exception?

A. If your firm is unable to attest to the certification, and you elect to proceed, please indicate “No” on Attachment B and discuss the qualifications you fail to meet. LACERA will review the materials submitted by Respondents. As stated in the RFP, LACERA reserves the right to reject, in whole or in part, any and all proposals received; to waive minor irregularities; to negotiate in any manner necessary to best serve the public interest, and to make a whole award, multiple awards, a partial award, or no award.

11. Has LACERA previously completed the sale of any limited partnership interests?

A. LACERA began investing in private equity partnerships in 1986 and has rarely sold interests in the secondary marketplace.

12. Does LACERA have a preference for bringing one large portfolio to market or is the preference to complete multiple smaller sales over a period of time?

13. What is the minimum transaction size that LACERA would consider?

A. LACERA is not constrained by timing or liquidity needs in this exploration of a sale. Accordingly, LACERA is not averse to flexibility in a sales structure that produces a superior outcome. LACERA will work with the selected Secondary Advisor to determine ideal minimum transaction sizes and pricing strategy for individual interests and the aggregate portfolio.

14. Can you please provide a breakdown of the $1.4 billion non-core portfolio by strategy (buyout, venture, energy, infrastructure, real estate, credit, etc.)?

A. Refer to Worksheets 1-3 in the Excel attachment. Manager level detail will be provided in later stages of RFP process.

15. What is the range of vintage years represented in the non-core portfolio?

A. Refer to Worksheets 1-3 in the Excel attachment. Manager level detail will be provided in later stages of RFP process.

16. When considering bids for limited partnership interests, will LACERA have a reserve price for each individual limited partnership interest or is LACERA more focused on pricing achieved for the sale portfolio in aggregate?

A. LACERA is not constrained by timing or liquidity needs in this exploration of a sale. Accordingly, LACERA is not averse to flexibility in a sales structure that produces a superior outcome. LACERA will work with the selected Secondary Advisor to determine ideal minimum transaction sizes and pricing strategy for individual interests and the aggregate portfolio.

17. Is LACERA open to a deferred payment structure where the buyer pays a portion of the purchase price at closing and then pays the remainder at a pre-agreed date (6, 12, 0r 18 months after closing)?

18. Will you be providing that sale portfolio at some point during the process (i.e. post the semi-finalist selection or after the formal interview process).

A. Refer to Worksheets 1-3 in the Excel attachment. Manager level detail will be provided in later stages of RFP process.

19. Could you please provide additional color on the profile of this non-core portfolio of 130 partnership interests valued at $1.4 billion that you could consider selling as part of this process? If you are unable to share specific fund names, we would be grateful if you could provide the breakdown by NAV of the 130 partnership interests by (i) the fund strategies (Buyout, Venture Capital, Real Estate, Natural Resources, Debt), (ii) fund vintages and (iii) fund geographies (US / Europe / Asia / ROW).

A. Refer to Worksheets 1-3 in the Excel attachment. Manager level detail will be provided in later stages of RFP process.

20. We understand that you are exploring a sale of all or a portion of those non-core partnership interests. Is there a minimum transaction size (by dollar amount and/or number of funds) that you would need to achieve in this sale process?

A. LACERA is not constrained by timing or liquidity needs in this exploration of a sale. Accordingly, LACERA is not averse to flexibility in a sales structure that produces a superior outcome. LACERA will work with the selected Secondary Advisor to determine ideal minimum transaction sizes and pricing strategy for individual interests and the aggregate portfolio.

21. We understand that you intend to hire a secondary advisor by mid-June 2018. What is your expected closing timing for a potential sale? Do you have a hard deadline to respect (such as December 31, 2018)?

A. LACERA is not constrained by timing or liquidity needs in this exploration of a sale. Accordingly, LACERA is not averse to flexibility in a sales structure that produces a superior outcome. LACERA anticipates a sales process will commence in Q3/18 leading to interests being sold by the end of 2018.

22. Would you be open to structured solutions such as deferred payments or would you require the purchase price to be paid in full cash at closing?

23. Given eligibility, whether or not LACERA consents to including our firm in the RFP process.

24. Whether or not our firm should partner with a valuation services firm in order to submit a response.

A. While there is no requirement that the Secondary Advisor have in-house valuation services, the firm should elaborate on how they plan to undertake the engagement and any additional costs to be incurred.