Los Angeles City Employees’ Retirement System (LACERS) plans to allocate up to $330m (€280m) for potential real estate fund commitments during the 2027 fiscal year, according to a board meeting document prepared by Townsend for the pension fund.
The investment plan for the new fiscal year, commencing 1 July, involves setting aside up to $130m for core opportunities and as much as $200m for non-core.
The core investment strategy will involve investing in fund managers with high-quality assets and exploring secondary market opportunities.
LACERS will also consider rebalancing within its core real estate portfolio by evaluating existing open-ended positions and engaging with specialist managers in sectors underrepresented in the portfolio.
The non-core strategy is expected to partner with specialist managers in alternative sectors through secondary market transactions and recapitalisations.
Townsend recommends that investors target high-conviction sectors, such as data centres, alternative housing strategies, industrial outdoor storage and truck terminals, to diversify industrial exposure and capitalise on strong rental growth themes.
At year-end 2025, LACERS held a $1.43bn real estate portfolio, representing 5.3% of its total assets, compared with a real estate allocation target of 7%.
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