Los Angeles County Employees Retirement Association, Pasadena, Calif., launched a search for emerging managers of active U.S. and non-U.S. equity strategies, said Jonathan Grabel, chief investment officer of the $53.5 billion pension fund.
The exact size of the mandate has not yet been determined. LACERA has an allocation of up to 5% for emerging managers in its $26 billion public equity portfolio. At its Sept. 11 meeting, the pension fund's board of investments decided to invest directly with emerging equity managers from its emerging manager public equity fund-of-funds strategy. At the same time, the board terminated the two managers of that fund-of-funds strategy, Northern Trust Asset Management and FIS Group, which had managed a combined $500 million.
What's more, by bringing the emerging manager equity program in-house, LACERA officials could better build a portfolio at reduced cost by eliminating the fund-of-funds' extra layer of fees, Mr. Grabel said.
The RFP is available on LACERA's website. Proposals are due at 3 p.m. PDT on Nov. 3. Mr. Grabel said. The goal is to have managers selected for the emerging manager equity program within 12 months.
Separately, the pension fund is launching an asset allocation study. Meketa Investment Group is assisting. The board at its July 10 meeting reviewed its asset allocation process and discussed approaches to implementing its asset allocation, including its current use of external managers, a direct investment approach, or something in between.
