Los Angeles City Employees' Retirement System committed up to $50 million in real estate fund Waterton Residential Property Venture XIV, agenda materials for LACERS' planned June 9 board meeting show.
The board had approved the commitment to the value-added real estate fund managed by Waterton in closed session with the investment closing on May 26.
Separately, LACERS terminated Alcentra from a $100 million credit mandate, redeploying the capital to Crescent Capital Group, board documents show. In July, LACERS selected four firms to manage private credit portfolios following a search. The managers were Benefit Street Partners and Monroe Capital LLC for the U.S. mandates, and Alcentra and Crescent Capital Group for the non-U.S. portfolios. While the contracts were being negotiated, staff and LACERS' general investment consultant were notified of significant and unexpected turnover of senior Alcentra executives, including the departure of CIO Vijay Rajguru. LACERS board decided to rescind its contract with Alcentra.
In other action, LACERS extended for one year, until June 30, 2021, Dimensional Fund Advisors' contract to run a $793 million active U.S. TIPS portfolio.
Also, LACERS' real estate consultant Townsend Group recommended that the pension plan in fiscal year 2021 pause commitments to open and closed-end real estate funds with pre-specified portfolios, as the carrying value of these assets may not reflect current, lower market values, according to board documents.
Townsend also recommended that LACERS pause funding of recent open-end investments, to the extent possible. Townsend also suggested LACERS commit $130 million to $210 million to real estate in fiscal year 2021.
LACERS' investment committee is expected to consider Townsend's investment plan on June 9. LACERS had $777 million in real estate as of Dec. 31 and a 7% real estate target.