Los Angeles Water & Power Employees’ Retirement Plan is searching for an active emerging markets equity manager to run a total of about $478 million, according to an RFP posted on its website.
The retirement plan is conducting a search for a potential replacement for incumbent manager Los Angeles Capital Management, according to materials from its June 26 board meeting.
According to a Sept. 20, 2023, memo to the board from Linda Le, retirement plan manager, included with the materials, the manager has been on watch since 2019 due to organizational issues. At that time, an investor representing 60% of LACM’s emerging markets equity commingled fund made a full redemption, increasing the water and power retirement plan’s weight to 45.5% from 12.5% of that commingled fund. As the manager’s emerging markets assets under management have declined, that weight has since increased to 88.6%, creating an increased concentration risk.
“While there are no concerns with LA Capital's ability to manage within this structure, the Plan does absorb a disproportionate amount of operating costs associated with this commingled vehicle,” Le said in the memo.
Retirement plan CIO Jeremy Wolfson could not be immediately reached about whether Los Angeles Capital Management is invited to rebid for the services.
The selected manager would run $406 million for the plan’s $17.3 billion defined benefit plan and $72 million for its $3.2 billion health plan.
The RFP is available on the retirement plan’s website. Proposals are due by 3 p.m. PDT on Aug. 7. A timeline for a selection was not provided.
Investment consultant RVK is assisting.
