Los Angeles Water and Power Employees intends to invest up to $500m (€473m) in real estate in 2023, according to the pension fund’s meeting document.
From now until the end of the year, Los Angeles Water and Power will consider issuing up to seven commitments to core real estate strategies, ranging from $75m to $300m.
The pension fund has set a target of investing up to $150m and $125m for value-add and opportunistic strategies, respectively, but could also end up not investing in either for the rest of 2023.
In 2022, Los Angeles Water and Power made $850m worth of new real estate commitments by approving four separate commitments for both core-plus and opportunistic, and three for value-add.
According to Los Angeles Water and Power’s real estate investment consultant StepStone, the plan for investing in core assets will include selectively increasing exposure to both residential and self-storage assets and allocating to core-plus strategies that would offer niche property-type exposure.
The investment plan for value-add could involve increasing non-core industrial exposure and focusing on managers that acquire assets below market value and discounts to replacement cost.
For opportunistic, the pension fund is expected to mainly consider investments that target broken capital structures and distressed real estate. It will also consider strategies that focus on high-growth and demographically favourable markets, including specific Asian markets and the West and South regions in the US, StepStone said.
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