Los Angeles City Employees’ Retirement System plans to commit $140 million to four new open-end core real estate funds this year and make $50 million in additional commitments in 2015, minutes from the pension fund’s Aug. 26 board meeting show.
Townsend Group, real estate consultant for the $14.4 billion pension fund, is recommending the pension fund this year commit about $35 million each to Clarion Partners’ Lion Industrial Trust, Jamestown Premier Property Fund, Morgan Stanley Real Estate’s Prime Property Fund, and Principal Real Estate Investors’ U.S. Property Account.
The recommendations will be presented to the board for approval at a later meeting. The recommendation is part of the pension fund’s decision in May to double its exposure to core real estate to a 60% target and decrease non-core investments to 40% from 70%. LACERS has an overall 5% allocation to real estate, with $739 million funded as of March 31.
Separately, Capital Prospects was the only semifinalist for the pension fund’s search for an active U.S. small-cap equities emerging manager-of-managers mandate. The selected manager would run approximately $150 million. LACERS’ staff will conduct additional due diligence and then general investment consultant Wilshire Associates and staff will recommend a course of action to the board at a later date.
The search was launched to refocus the strategies of the emerging manager of managers currently in LACERS’ portfolio to small-cap equities away from large and midcap, pursuant to the board’s decision on Oct. 22, 2013. LACERS will retain Attucks Asset Management, the incumbent small-cap equities emerging manager of managers, as part of this mandate. An RFP was launched on June 9.
No further information was available at deadline. As a matter of policy, staff does not communicate the board’s action until the board has approved the draft minutes of the meeting, said Mimi Lin, spokeswoman, in an e-mailed response to questions.