Los Angeles County Employees Retirement Association, Pasadena, Calif., committed up to about $220 million to two alternative investment funds, the $65.5 billion pension fund reported.
In closed session Wednesday, the board committed up to €100 million ($119.1 million) to Antin Mid Cap Fund I, a real assets fund focusing on middle-market opportunistic infrastructure investments mostly in Europe with some investments in North America. The fund is managed by Antin Infrastructure Partners.
LACERA also committed up to $100 million to Excellere Capital Fund IV, a lower middle-market buyout fund investing in U.S. health-care companies managed by Excellere Partners.
Separately, LACERA's board Wednesday approved 10-year and 20-year capital market expectations by its general investment consultant Meketa Investment Group as part of its strategic asset allocation review. The board could review various strategic asset allocation and policy benchmarks alternatives as early as its April meeting, a timeline shows.
In a report to the board, Meketa said that investors will have to take on more risk for the same return, a result of low interest rates as well as higher prices that could lead to lower returns for equities and private equity.
During Wednesday meeting, Steven P. McCourt, Meketa's managing principal and co-CEO, said his firm's asset allocation analysis takes climate change into account. He said that has become a common practice and that Meketa analyzes potential portfolio performance based on whether the world will warm more or less than expected. Portfolios perform worse in both cases, he said. Portfolios in higher warming scenarios perform worse due to added volatility and uncertainty from a warmer planet. Less warming shows lower returns on the assumption that significant public policy changes slowed global warming and those policy changes impact certain market sectors such as energy.
The board also authorized LACERA CIO Jonathan Grabel to rebalance among board-approved illiquid credit managers in certain situations. Three conditions must be satisfied before the CIO can rebalance the portfolio: The manager must be in good standing; the rebalancing needs to be within existing target ranges; and no new contract is required. Illiquid credit is currently below its target allocation by $400 million, and the CIO plans to initially increase the allocation of two existing separate account managers: Napier Park, which ran $477.1 million, and Magnetar, which managed $169.2 million, both as of Dec. 31.
