Los Angeles County Employees Retirement Association, Pasadena, Calif., terminated international real estate securities manager EII Capital Management, which managed a $163 million separate account, due to key executive departures, said David Kushner, chief investment officer of the $47 billion fund in an e-mailed response to questions.
EII Capital Management has managed the global ex-U.S. real estate securities allocation for LACERA since May 2008. LACERA was notified by EII on July 22 that James Rehlaender, managing director and portfolio manager, international and global real estate securities, left the firm on July 22; Peter Nieuwland, senior analyst and co-portfolio manager for Europe left effective Aug. 15; and Suang Eng Tsan, senior analyst and co-portfolio manager for Asia resigned.
Rather than launch an immediate search, the board opted to use BlackRock's transition management group to liquidate the portfolio. Staff plans to review the international real estate program to determine whether LACERA should continue investing in international real estate securities. If so, an RFP would be launched for a replacement manager at a later date. LACERA's real estate consultant Townsend Group assisted.
Separately, the board also adopted a formal process to evaluate issues from environmental, social, and geopolitical causes. The process will be launched when ESG issues are directed to a committee to decide whether to review the issue and direct staff to assess the potential economic and reputational impact on LACERA. As part of the process staff will work with money managers to conduct an analysis of the risk/reward of the affected investment.