Los Angeles Fire & Police extends Semper Capital for a year

Los Angeles Fire & Police Pensions board extended Semper Capital Management's mandate managing a $55 million structured credit portfolio by one year, said Ray Joseph, CIO of the $30.7 billion pension fund, in an email.

The new contract will expire Sept. 30, 2022.

The board at its Sept. 15 meeting agreed with the recommendation of general investment consultant RVK to renew Semper's contract despite recent turnover on the team, including the departure of its hedge fund portfolio manager and a settlement with the SEC of charges that Semper had misled investors about the performance of a mortgage-backed securities fund.

RVK said the contract extension was still the best course of action due to Semper's strong historical performance and stability of the senior leadership. But the pension fund's staff disagreed and recommended that Semper's contract not be renewed.

Separately, LAFPP reported a gross return of 32.6% for the fiscal year ended June 30, outperforming its 30% benchmark.

The three-year gross return was a gross 13.2%, besting its 12.3% benchmark, while the five-year return was 12.6%, outperforming its 12% benchmark, and the 10-year return was 10% above its 9.2% benchmark.

The pension returned a gross 14.1% for the fiscal year ended June 30, 2020, compared with its 12.8% benchmark.

The best-performing asset class in the fiscal year ended June 30 was domestic equity, which returned a gross 46.5%, above its 44.2% benchmark; followed by international equity, 40%, (36.3%); commodities, 32.6% (30%); real estate, 18.5% (15.2%); and fixed income, 4.6% (1.1%)

As of June 30, LAFPP actual allocation was 34.2% domestic equity, 19.1% international equity, 17.6% fixed income, 13.5% private equity, 4.5% real estate, 4.2% cash, 3.7% commodities and the rest in real estate investment trusts.

LAFPP's target allocation is 29% domestic equity, 22% fixed income, 21% international equity, 14% private equity, 7% real estate, 3% REITS, 2% private credit, 1% commodities and 1% cash.