Los Angeles County Employees Retirement Association, Pasadena, Calif., reported a net return of 0.1% for the fiscal year ended June 30, outperforming its custom benchmark of -4.6%.
Also, among U.S. public pension funds that Pensions & Investments tracks, LACERA is one of only a few with a positive return for the fiscal year ended June 30.
The $70.4 billion LACERA also reported that for the three, five and 10 years ended June 30, the pension fund returned an annualized net 8.5%, 8.1% and 8.6%, respectively, surpassing their respective benchmarks of 6.2%, 7% and 7.9%.
Indeed, LACERA was "materially ahead" of its custom benchmark in all time periods, CIO Jonathan Grabel said at Wednesday's board meeting. However, the pension fund's assumed rate of return is 7%.
Its best-returning asset class for the one-year period was real assets and inflation hedges with a 14.3% net return, compared with its 12.4% benchmark; followed by growth, -2% (-8.1% for the benchmark); credit, -4.2% (-7.5%); and risk reduction and mitigation, -7.1% (-7.7%).
As of June 30, LACERA actual asset allocation was 50.2% growth, 19.9% risk reduction and mitigation, 17.8% real assets and inflation hedges, 11.1% credit, and 1% overlays and hedges. LACERA's target allocation is 51% growth, 21% risk reduction and mitigation, 17% real assets and inflation hedges, and 11% credit. There is no target allocation for its overlays and hedges strategy.
Separately, LACERA's board on Tuesday rehired State Street Bank and Trust Co. for global custody and commercial banking services.
The pension fund retained incumbent State Street following an RFP launched in January. State Street was the sole respondent to the RFP.
The staff contacted three other global custodians that said they declined to respond to the RFP because they were unwilling to act as fiduciaries, Jude Perez, principal investment officer, told the board at the meeting Wednesday.
