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LA Police & Fire seeks core manager

The pension system has not added a new separate account manager since 1998.

The Los Angeles Police & Fire Pension system is searching for a real estate manager for a core separate account, according to a request for proposal issued earlier this month.

The pension system currently has two separate account managers, Chicago-based Heitman Capital Management and Houston-based Sentinel Trust Company, hired in 1988 and 1998, respectively. The separate accounts total 15 properties, which include multifamily, office, industrial and retail real estate, valued at $729 million, according to the RFP.

Now, LA Police & Fire is seeking to expand its separate account bench through its search for a manager with at least $1 billion in private real estate assets under management and at least a decade of real estate investing experience. The pension system is looking for a firm with experience across the four main property types and the US, a 10-year “competitive” track record and a history of investing in core and non-core real estate.

The Townsend Group is overseeing the search and will shortlist a group of over 30 managers for consideration. Proposals are due May 15, with interviews during the first week in June to narrow the candidate list to three finalists. The board plans to finalize the contract in August.

Townsend, the Cleveland, Ohio-based consultancy, wrote in the RFP that LA Police & Fire is “slightly overweight to real estate” and had met its 10 percent allocation target as of September 30. However, upcoming liquidations are expected to bring its allocation to the asset class below target. The pension system is particularly overweight to core real estate, with 75 percent of its real estate holdings in the strategy, against a 60 percent target allocation.

The pension system had $2 billion invested in real estate and $20.2 billion in its overall portfolio as of March 31, according to its most recent investment report.