Los Angeles County Employees Retirement Association, Pasadena, Calif., changed some of the investment guidelines of its real assets portfolio with the aim of continuing to boost private assets in a combination of funds, co-investments and secondary purchases, said Jonathan Grabel, chief investment officer of the $74 billion pension fund.
LACERA's real assets portfolio is currently made up of core real estate, infrastructure, natural resources/commodities and Treasury inflation-protected securities. The pension fund has been slowly decreasing the public markets exposure of infrastructure and natural resources within its real assets portfolio as private assets increase, with the portfolio expected to be made up solely of private assets by 2027, according to a report to the board.
Among the changes made to the real assets portfolio structure made by the board at its Jan. 10 meeting are increasing potential co-investments and secondary purchases across the portfolio. Under the new investment guidelines, LACERA can now commit up to 30% of the real assets target annual commitments in co-investments and secondaries, an increase from $250 million maximum total commitments in co-investments and secondaries.
LACERA is expected to commit $900 million to infrastructure and $650 million to natural resources in 2024.