Los Angeles Fire and Police Pensions (LAFPP) is planning to extend its separate account relationships with managers AEW Capital and Cohen & Steers Capital Management for a further three years.
The pension fund disclosed in a meeting document that it intends to approve the rehiring of AEW for the management of the $440m real estate equity account and Cohen & Steers for the $499.1m US real estate investment trust portfolio.
The strategy for the AEW-managed account will involve selling small and older assets that are located in secondary markets and acquiring larger properties in the top 20 US metropolitan statistical areas.
According to the meeting document, the AEW account underperformed for the one- and three-year time periods due to writedowns issued by the manager in response to rising interest rates and inflation. The account’s five-year and since-inception periods produced a strong performance, the meeting document stated.
The Cohen & Steers-managed account is benchmarked against the FTSE NAREIT All Equity Index. LAFPP’s meeting document revealed that the manager outperformed the benchmark every year except for 2022.
The portfolio had an overweight to single-family rental and data centres and underweight to infrastructure.
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