Los Angeles Fire and Police Pensions (LAFPP) is starting its private infrastructure investments with a $500m (€456.9m) pacing plan for 2025, after its board approved a 2% allocation to the asset class.
As previously reported, the $31bn pension fund had planned to adjust its real assets portfolio by replacing its 2% commodities allocation with a new 2% infrastructure investment.
The proposed diversification into infrastructure is expected to deliver higher returns during periods of stable or declining inflation while reducing exposure to equity market fluctuations.
For its 2025 infrastructure pacing strategy, LAFPP plans to allocate up to $300m to strategic or core investment opportunities. This portion may consist of two commitments, each ranging from $100m to $150m, potentially in existing open-end funds or new fund launches.
The remaining $200m is expected to target tactical or non-core investments with commitments worth between $80m and $100m.LAFPP’s long-term plan is to creat a private infrastructure portfolio with a target allocation of 60% core and 40% non-core investments.
The infrastructure portfolio’s investment focus will be on developed markets, with a primary emphasis on North America and Europe. Up to 20% of the portfolio may be allocated to non-OECD markets.
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