LACERS to commit up to $170 mln a year to real estate funds

  • AUM: $17 bln
  • RE Target Allocation: 7 pct
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  • Why its important: LACERS ramps pace to meet increased target to real estate

Los Angeles City Employees’ Retirement System set its annual real estate pacing at its March meeting.

LACERS will commit between $140 million to $170 million in real estate commitments for the year, in its Core and Non-Core funds, according to its real estate fiscal year 2019-20 strategic plan.

In April 2018, on the advice of real estate consultant Townsend Group, the board changed its asset allocation target to increase real estate exposure from 5 percent to 7 percent of total plan assets. The new pacing model will allow the system  to reach its target.

The market value of LACERS’s real estate portfolio was $787 million, or 4.4 percent of its total plan, as of Sept. 30, 2018.

Board members said their approach in the U.S market has been more conservative, but LACERS’s baseline scenario shows that to reach its 7 percent allocation target it would need to invest $170 million a year over the next 5 years.

The system is looking for opportunities within its non-core portfolio by targeting commitments in industrials, U.S. apartments and U.S. office, according to meeting documents.

LACERS also revealed that it’s looking to add emerging managers with the help of Townsend Group during its sourcing and monitoring process.