Los Angeles City Employees’ Retirement System’s board at its Aug. 27 meeting hired Northern Trust Co. for master custodial and securities lending services.
The board for the $24.3 billion pension fund selected Northern Trust following a search launched Sept. 11, 2023. Northern Trust was the incumbent.
The board also approved a one-year contract extension for Axiom Investors, which manages $323 million in an active non-U.S. emerging markets growth equities portfolio. The contract was set to expire Dec. 31. While Axiom had been on LACERS’ watchlist for underperformance, the manager had improved in the past year, outperforming the benchmark by 273 basis points as of June 30, according to a staff report.
Separately, the board adopted its updated Principles for Responsible Investment Action Plan and updated ESG risk framework.
LACERS has been a PRI signatory since September 2019, agreeing to consider ESG factors in its investment analysis and decision making and to seek appropriate disclosure on ESG issues by the entities in which it invests, among other things. To ensure its continued progress, LACERS adopts an updated operational PRI plan as well as an ESG risk framework each year.
The action plan as of Aug. 27 includes working with LACERS general investment consultant NEPC to determine how to evaluate the effectiveness of ESG strategies and the fiscal impact, asking money managers to periodically report their ESG activities and encouraging alternative investment general partners to adopt an ESG decision making framework. LACERS ESG framework was updated to reflect its fossil fuel exposure, which was 525 publicly traded companies representing about $688 million, made up of $348 million in active funds and $341 million in passive funds as of June 30.
The total amounted to about 3% of LACERS' total fund portfolio.
