The Los Angeles Fire & Police Pension System board postponed interviewing 11 finalists in its search for an undetermined number of REIT managers until the first quarter; the new date has not been set. Interviews originally were scheduled Dec. 8. The managers will run a total of $175 million and $200 million in three categories: domestic, international and hedged, said Tom Lopez, CIO of the $13 billion system. The finalists are: Duff & Phelps, Morgan Stanley, Urdang, AEW Capital, Heitman, Adelante Capital, Principal Global Investors, Advantus Capital, Cliffwood Capital, Woodbourne Absolute Return and Rosen Real Estate Securities.
The board also approved a new real estate policy for its 10% real estate allocation that shifts the portfolio to half in commingled accounts; it is currently dominated by separate accounts. The system will invest in value-added and opportunistic real estate in commingled funds; separate accounts that are now value-added will be in core. Exact percentages have not yet been finalized.
The system will also renew the contract of Lowe Enterprises Investment Management, which runs a $50 million real estate portfolio. In addition, it allocated $30 million to CIM Urban REIT.
The system also hired Western Asset Management to run $295 million and Bridgewater to run $200 million, both in TIPS.
In January, the board is expected to interview finalists and select one or two managers to handle $120 million in a hedge fund of funds, a new allocation. They are also expected to decide whether to terminate Hamilton Lane, which manages a $325 million private equity discretionary portfolio. Hamilton Lane executives declined to comment, said spokesman Michael Mandelbaum. The board also plans to decide whether to cut back to two or three private equity managers, from four now, and whether the managers should run their portfolios on a discretionary or non-discretionary basis, Mr. Lopez said. The fund has 10% of assets allocated to private equity.
Separately, the system is expected to post an RFP for a general consultant on its website at www.lacity.org/PEN/index.htm in January, he said.
