Los Angeles Water & Power Employees' Retirement Plan as early as September plans to launch RFPs for two new mandates, unconstrained global equity and active international small-cap equity, Jeremy Wolfson, CIO of the $14.4 billion system, said in an email.
The board on July 18 adopted investment guidelines for the new asset classes. The pension plan has a long-term public equity target allocation of 48%. Some 6 percentage points of its public equity portfolio is allocated to global equity and 4 percentage points to active international developed market small-cap equity. The pension plan's general investment consultant, RVK, is assisting. There is no timeline yet for the RFPs.
Separately, the board hired Jennison Associates for a $700 million U.S. large-cap growth equity portfolio. An RFP was issued in January. The other finalists were Los Angeles Capital Management, MFS Investment Management and Voya Investment Management. The incumbent, Fred Alger, bid but the firm was not a finalist, Mr. Wolfson said. RVK assisted.
Also, the board in closed session committed a total of up to $150 million to two alternative investment funds. It committed up to $63 million from the pension fund and up to $12 million from the Retiree Health Benefits Fund to Crestview Partners IV, a middle market buyout fund. Los Angeles Water & Power has invested with Crestview in the past, including a total commitment of $60 million from the two funds to Crestview Partners III in 2015.
The board also committed up to $60 million from the retirement fund and up to $15 million from the retiree health benefits fund to Almanac Realty Securities VIII, a value-added fund focused on making debt and equity investments in real estate companies. The board has invested with Almanac Realty Investors in the past, including a total of $30 million commitment to Almanac Realty Securities VII in 2015 and $20 million to Almanac Realty Securities VI in 2012.
The $14.4 billion in assets the board oversees represents the combined pension, health, death and disability plans.
