By Muskan Arora
The $18.5B Los Angeles Water and Power
Employees’ Retirement Plan is set to make its first infrastructure investment, with
an intention for infrastructure to make up 50% of the real return portfolio in
the coming years.
To accommodate this plan, the proposal stated slashing commodities to 25% from 30%, reducing passive short-duration treasury
inflation protected securities to 25% from 70% and reallocating the 3% timber allocation
to infrastructure.
This proposal was included in the recent board
meeting documents of the pension plan.
This move reflects the pension’s outlook
that infrastructure provides a potential for stronger risk-adjusted returns as
compared to other liquid real return strategies.
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Once approved, consultant
RVK and the investment staff will start to look for infrastructure managers this year.
During the meeting, the pension plan
also committed up to $50M to Harrison Street Core Property Fund, a core
open-ended US real estate fund.
The fund invests in alternative property
sectors including student and senior housing, medical offices, self-storage
facilities and data centers.Â
At its March meeting, the pension plan disclosed its pacing of $500M towards real estate investments divided equally between core/core plus and non-core allocations.Â
