Los Angeles City Employees Retirement System (LACERS) is planning to resume its core real estate investing programme in the fiscal 2024 year beginning 1 July following a brief pause.
LACERS suspended new core real estate investments during the second half of last year due to what it referred to as anticipated valuation adjustments across the open-ended core and core-plus universe.
The Townsend Group, the pension fund’s investment consultant, disclosed in a meeting document that LACERS has now set a $100m core real estate pacing plan for the 2024 fiscal year.
Additional write-downs are anticipated during the 2023 calendar year and Townsend recommends resuming core real estate commitments after valuations adjust further.
The pension fund’s plan for core real estate could include topping up commitments to managers that have an overweight to apartments, industrial and alternative sectors.
LACERS is also expected to consider opportunities that would help rebalance and consolidate the core portfolio to optimise fees and could also explore the sale of underperforming positions.
For the fiscal 2023 year, LACERS could also be issuing non-core commitments ranging between $50m to $75m to a total of up to $200m.
LACERS expects to invest additional capital in its real estate emerging manager programme.
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