LACERS might launch two equity searches for a combined $530 million
By Arleen Jacobius | March 1, 2013 4:23 pm
Los Angeles City Employees' Retirement System could soon launch RFPs for one or more active investment managers for a $330 million total active international core long-only small-cap equities allocation, and one or more active investment managers for a $200 million emerging markets debt allocation, according to information on the $11.5 billion pension fund's website.
Funding for the international small-cap core equity allocation is expected to come from the $4.22 billion domestic and $1.39 billion international regional equity asset classes, according to materials from the board's Feb. 26 meeting.
Funding for the emerging markets debt mandate will come primarily from cutting domestic equity. The pension fund was overexposed to domestic equities as of Dec. 31, with 36.7% of the pension fund invested in the asset class compared to its 24% target and 29% maximum, according to the pension fund's most recent portfolio performance review. The benchmark for the new allocation would be the J.P. Morgan EMBI Global Diversified index.
If the RFPs are launched, they will be posted on LACERS' website at www.lacers.org/aboutlacers/request-for-proposals/index.html.
General investment consultant Wilshire Associates is assisting.
Information on the board's actions will not be made available until the minutes of the board meeting are released, according to Mimi Lin, senior management analyst II.
Separately, the board at its Feb. 12 meeting extended for one year the contract of Hewitt EnnisKnupp for strategic planning and board governance consulting services.
In other news, LACERS posted a net-of-fees return of 14.5% for the year ended Dec. 31, according to a performance report. The top-performing asset class for the year was international equities, with a return of 18.4%, followed by domestic equities with 16.4%.