NEWS

LACERA chooses consultant for its hedge funds, credit and real assets portfolios

By Muskan Arora

The $77 billion Los Angeles County Employees’ Retirement Association (LACERA) has re-hired Albourne as consultant for its hedge funds, credit and real assets portfolios.

The system's two final-round contenders were Albourne and Mercer. Other consultants who responded to the RFP, launched in December, were Meketa and Wilshire.

The system allocates 8% to hedge funds, 7% to real assets including real estate and TIPS and 13% to credit, as approved by the board in April.

Albourne significantly scored higher than Mercer in the final evaluation on mitigation of conflict, servicing capabilities and technology.

Within the mitigation of conflict parameter, Albourne’s business model offering non-discretionary consulting services over Mercer’s combination of different discretionary and non- discretionary services, allows the chosen to “lend itself to a higher degree of potential conflict when considering allocation of resources and access to investments with limited capacity.”

“While this combination model of discretionary and non- discretionary services may be common in the consulting service industry, it lends itself to a higher degree of potential conflict when considering allocation of resources and access to investments with limited capacity,” said the LACERA’ staff.

Owing to a robust manager and market research portal, more risk analytics and portfolio optimizer tools while conducting its operational due diligence (ODD). Albourne has 130 dedicated ODD analysts, while Mercer has just 45.

Albourne has built a robust IT infrastructure which is propriety and built exclusively for client use, whereas Mercer’s technology was built using third party platforms.

Albourne’s current five-year contract with LACERA will end in June 2024.