Los Angeles Water & Power Employees' Retirement Plan and retiree health benefits fund officials plan to commit about $225 million to new real estate investments in 2020, according to board meeting materials for the $16.1 billion plans.
Specifically, plan officials expect to commit $60 million to $100 million each to core, value and opportunistic real estate. The plans have an 8% target real estate allocation.
StepStone Group, the retirement plan's real estate consultant, estimates that to stabilize its real estate portfolio at its 8% target, plan officials in 2021 would be required to commit up to $75 million to core, up to $50 million to value and up to $50 million to opportunistic.
Separately, officials of the plans are targeting $400 million of private equity commitments in 2020. The plans have an 8% private equity allocation. Its strategic plan for the year includes increasing geographic diversification by making commitments to European strategies and selective commitments to other regions, including Asia and emerging markets. The plan also includes underweighting venture capital and private equity funds of funds but increasing late-stage and growth capital commitments. StepStone, also the plans' private equity consultant, assisted.
Officials at the plans also finalized its commitment of $20 million by the pension plan and $5 million from the retiree health-care plan to Prologis Targeted U.S. Logistics Fund, an open-end commingled fund focusing on investing in core logistics real estate in the U.S. The plans made the same commitments to the fund in 2015. Plan officials approved the commitments of up to $20 million by the pension plan and $5 million from the retiree health-care plan in October.
