The Los Angeles County Employees Retirement Association (LACERA) is one of the largest county retirement systems in the United States, managing approximately $75 billion in assets as of mid-2024. LACERA provides retirement, disability, and death benefits to employees of Los Angeles County and certain other public agencies, serving over 180,000 active members, retirees, and beneficiaries.
Investment Strategy
LACERA employs a diversified investment strategy across public equities, fixed income, real estate, private equity, and other alternatives. The board of investments sets the strategic asset allocation, which is informed by periodic asset-liability studies. The portfolio construction reflects LACERA’s long-term investment horizon and fiduciary commitment to its members.
Domestic and international equities represent the largest allocation, providing long-term growth potential. Fixed income delivers stability and cash flow for ongoing benefit payments. LACERA has developed a substantial alternatives program, recognizing the role of private markets in enhancing returns and diversifying the overall portfolio.
Private Markets Approach
LACERA’s private markets program is among the more established for county-level pension systems. The private equity allocation includes commitments to large buyout, mid-market buyout, growth equity, venture capital, and secondary strategies. The system maintains relationships with many of the leading global private equity firms and also invests through an emerging manager program.
The emerging manager program is a notable feature of LACERA’s approach, designed to identify high-potential managers early in their development. This program reflects both a commitment to expanding the manager universe and an investment thesis that smaller, focused strategies can deliver attractive returns.
Real estate is a significant component of the alternatives portfolio, with investments across core, value-add, and opportunistic strategies. LACERA invests through commingled funds and separate accounts. Infrastructure investments have grown as LACERA recognizes the asset class’s attractive risk-return characteristics and income stability.
The internal investment team conducts rigorous due diligence, supported by external consultants. Manager evaluation covers track record, team stability, process discipline, operational infrastructure, and alignment of interests. LACERA has been attentive to fee structures and has advocated for transparency and fee efficiency across its alternatives portfolio.
Frequently Asked Questions
How large is LACERA's private equity program?
LACERA targets approximately 10-12% of total assets in private equity, representing roughly $8-9 billion in committed capital. The system invests across buyout, growth equity, venture capital, and secondary strategies with relationships spanning leading global managers.
Does LACERA have an emerging manager program?
Yes. LACERA has maintained an emerging manager program designed to identify talented managers early in their development. The program reflects the system's commitment to expanding the manager universe and accessing differentiated investment opportunities that larger, more established firms may not pursue.
How should fund managers approach LACERA?
LACERA maintains an experienced internal investment team that sources and evaluates opportunities. The system also works with external consultants. Managers should submit materials to the investment office or engage through consultant relationships. The board of investments reviews and approves commitment recommendations. Expect a thorough due diligence process.
