Los Angeles Water & Power Employees' Retirement Plan expects to imminently launch an RFP for a private equity consultant, said Jeremy Wolfson, chief investment officer for the $12.3 billion pension plan, in an email.
Plan officials are launching the search because incumbent Pension Consulting Alliance's contract is set to expire on Dec. 31 and it has recently undergone organizational changes, according to a memorandum by Linda P. Le, retirement plan manager, for the board's May 10 meeting. PCA has been the pension plan's private equity consultant since 2008.
“Staff believes that it is prudent to initiate the RFP process again for private equity consulting services due to the recent organizational changes at PCA,” the memo states.
PCA will be invited to rebid. The pension plan's long-term private equity target allocation is 8%. It had $334.6 million private equity portfolio as of Feb. 28, or about 3% of plan assets.
The RFP is expected to be posted on the pension plan's website. The board is expected to make a decision in the fourth quarter.
Separately, the pension plan rehired Courtland Partners as its real estate consultant, contingent on successful contract negotiations. The pension fund launched an RFP in January. Other finalists were Hamilton Lane Advisors, ORG Portfolio Management, Pension Consulting Alliance and The Townsend Group. The pension fund had $703 million invested in real estate as of Jan. 31, or about 5.7% of the portfolio. The pension plan's long-term real estate target is 8%.
The pension board also extended the contract of Segal Co. as actuary for an additional three years, ending July 24, 2020.
Also, the pension fund earned 10.96% net of fees for the year ended March 31, compared to the plan's policy index of 11.44% for the same period. The plan's net return for the three years ended March 31 was 5.96% and its five-year return was 8.11%. The best-performing asset class during the one-year period was domestic equity, with an 18.40% net return. The worst-performing asset class was hedge funds at 1.26% net of fees, with a one-month lag.