Los Angeles County Employees Retirement Association, Pasadena, is expected to launch an RFP for a real estate consultant.
The board of the $58.2 billion on Wednesday approved the minimum qualifications and other criteria for the search. The initial five-year term of the contract of incumbent Townsend Group, a division of Aon, expires in June 2021. Townsend will be invited to rebid.
The RFP could be launched as early as late August, with a finalist selected in December or January 2021. The RFP is expected to be posted on LACERA's website.
LACERA has $4.5 billion in core and value-added real estate and $869 million in opportunistic real estate. LACERA's real estate targets are 7% in core and value-added and 2% in opportunistic.
Separately, the board expanded its in-house co-investment program to include potential transactions from private equity consultant StepStone Group.
According to a presentation to the board, staff recommended casting a wider net for co-investments due the negative impact of the pandemic on private equity deal flow. What's more, LACERA may be able to fill a hole in demand expected to be left by other investors that might be reducing their private equity commitments and co-investments.
Before the change, in-house co-investment deals could come from LACERA's private equity managers as well as its discretionary private equity managers — J.P. Morgan, Pathway and Morgan Stanley. LACERA still has a co-investment limit of $150 million for 2020. The fund can commit up to $40 million per investment on buyout or growth capital transactions based in the U.S. LACERA deployed $50 million in eight deals in the first six months of 2020 and had $273 million in co-investments as of Dec. 31. LACERA has $6.4 billion total invested in private equity and a 10% private equity target allocation.
