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Pension Funds

Los Angeles City posts 9.23% return, extends LM Capital’s contract

Los Angeles City Employees' Retirement System earned a net 9.23% for the fiscal year ended June 30.

The $17.9 billion pension fund returned an annualized 7.55% for the three years, 8.65% for the five years, 6.91% for the 10 years and 8.12% for the 15 years ended June 30.

LACERS outperformed its benchmark for all periods; its benchmark returns were 8.59% for the year, 7.41% for the three years, 8.38% for the five years, 6.82% for the 10 years and 7.8% for the 15 years ended June 30. The pension fund returned 13.3% in the previous fiscal year.

The best-performing asset class for the one-year period was U.S. equity with a 15.33% return, compared to its 14.78% benchmark. Domestic stocks were followed by private equity at 13.93%, (18.18% benchmark); non-U.S. equity, 9.85% (7.28%); real estate, 8.04% (9.31%); real assets, 5.87% (8%); credit opportunities, 1.82% (1.14%); and core fixed income, -0.28% (-0.4%).

LACERS currently has 30.8% in non-U.S. equity, 27% in equity, 17.5% core fixed income, 10.3% private equity, 9.4% real assets, 4.6% credit opportunities and 0.4% cash.

Separately, LACERS renewed the contract of LM Capital Group, which manages a $271 million active domestic fixed-income portfolio, board minutes from its Aug. 28 meeting show.

Pension fund officials extended LM Capital's contract for four years, now ending Feb. 28, 2023. The contract was set to expire on Feb. 28, 2019, and the board renewed the contract to allow LACERS "to maintain a diversified exposure to the domestic fixed-income markets," according to the minutes.