The Los Angeles City Employees’ Retirement System (LACERS) has selected Courtland Partners, ORG Portfolio Management and The Townsend Group as semi-finalists in its search for a new real estate consultant. The search follows the $11.8 billion pension plan’s April decision to commit $225 million to real estate investments over the next three years.
A total of seven firms submitted proposals, of which Courtland, ORG and Townsend, along with Hewitt EnnisKnupp and RV Kuhns and Associates, met LACERS’ minimum qualifications. The pension plan evaluated the remaining five firms using a scoring system based on qualities outlined in its request for proposal (RFP) issued on April 29.
According to documents from the August 13 board meeting, the criteria included: “ability of the firm to provide the services referred to in the RFP; experience, depth and strength of the firm and consulting team assigned to LACERS; soundness of investment philosophy and approach to meeting LACERS’ needs; quality, clarity and responsiveness of proposal; and fee proposal.”
Courtland, ORG and Townsend achieved the highest average scores, with Courtland scoring the highest overall. The Ohio-based consulting firm, which serves as LACERS’ current real estate consultant, is contracted to continue advising the pension plan until April 2014.
The board unanimously approved the three highest-scoring firms as semi-finalists. LACERS staff will now conduct reference checks and on-site due diligence visits in order to make a recommendation to the board regarding finalist candidates.
As reported by PERE in April, LACERS expects to commit $225 million to real estate over the next three years, beginning with $85 million in proposed investments this year. The pension system also expects to make real estate commitments of $85 million in 2014 and $55 million in 2015 to achieve or maintain its 5 percent allocation to the asset class, assuming 5 percent growth for its overall portfolio.