Los Angeles County Employees Retirement Association, Pasadena, Calif., selected an implementation plan for the new asset allocation it adopted a few months ago, said John McClelland, principal investment officer, real estate for the $46.7 billion pension fund in an email.
LACERA officials expect to launch a search in the third quarter of 2016 for risk-parity managers for a new 5% “other opportunities” allocation. It expects to invest in three to five strategies over the course of three quarters. Pension fund officials also plan to launch an RFP for an active commodity manager in the fourth quarter of 2016. The allocation size has not been determined.
LACERA officials will also be increasing the pension fund's fixed-income allocation to 24.3% from 22.5% over a three-month transition period by rebalancing out of global equities, which are being reduced by 8.6 percentage points to 39.9%. No fixed-income searches are planned.
The rest of the target asset allocation consists of reducing private equity by one percentage point to 10%; reducing commodities by 0.2 percentage point to 2.8%; increasing hedge funds by two percentage points to 5%; and increasing real estate by one percentage point to 11%. The rest is in cash.
The hedge fund increase will be by investing in existing hedge fund of funds and the possible addition of a credit opportunities fund.
