LACERA decreases allocation to real assets

The US public pension plans to decrease net allocation to real assets by $1bn, sell more than $500m of apartments, increase commitments to industrial funds, and commit up to $500m into existing separate account managers.

LACERA plans to realize a $1 billion net reduction in real asset allocation. Total completed sales in apartments is currently $263 million, with $501 million of expected sales to be completed within the 2019-2020 fiscal year. Further evaluation on Office and Retail exposure options will be completed within the 2019-2010 fiscal year as well.

LACERA considers additional commitments to industrial fund, having already made $35 million of net new industrial investments.

To maintain vintage year exposure, LACERA authorizes up to $500 million of new investments by existing separate account managers Clarion, Heitman, Invesco, DWS/RREEF, and Stockbridge. This proposal is pending Board approval.

As illustrated in the charts below, LACERA currently commits 11.9% of its assets to Real Estate. It made three commitments to private real estate funds with a 2018 vintage year which combined constitute $257 million.

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