Los Angeles Fire and Police Pensions (LAFPP) manages the retirement assets of sworn members of the Los Angeles Fire Department and Los Angeles Police Department. With approximately $30 billion in assets under management as of mid-2024, LAFPP is one of the larger single-city public safety pension funds in the United States.
Investment Strategy
LAFPP maintains a diversified investment portfolio designed to achieve long-term returns sufficient to meet its pension obligations. The asset allocation includes domestic and international equities, fixed income, real estate, private equity, and other alternatives. The board of fire and police pension commissioners sets strategic allocation targets, informed by asset-liability studies and consultant guidance.
Public equities provide long-term growth and form the core of the portfolio. Fixed income delivers stability and cash flow for benefit payments. The system has built a meaningful alternatives program that aims to diversify return sources and capture private market premiums.
Private Markets Approach
LAFPP’s private markets program includes allocations to private equity, real estate, and infrastructure. The private equity portfolio spans buyout and growth strategies, with the system investing through both primary fund commitments and co-investments. LAFPP focuses on managers with proven track records and disciplined investment processes.
Real estate represents a significant alternative allocation, with investments across core, value-add, and opportunistic strategies. The system invests through commingled funds and has selectively pursued separate account arrangements. Infrastructure investments target assets with stable, long-duration cash flows.
LAFPP has adopted policies supporting emerging and diverse managers as part of its broader investment program. The system considers minority-owned, women-owned, and emerging firms alongside established managers, evaluating all on investment merit while recognizing the potential benefits of a broader manager universe.
The board of commissioners provides active governance over the investment program, reviewing and approving individual commitments. The internal investment staff and external consultants conduct thorough due diligence covering performance attribution, team stability, process discipline, operational infrastructure, and fee structures. Commitment sizes typically range from $25 million to $75 million depending on strategy and fund size.
Frequently Asked Questions
What is the size of LAFPP's private equity allocation?
LAFPP targets approximately 10% of total assets in private equity, representing roughly $3 billion in committed capital. The system invests across buyout and growth strategies, focusing on established managers with consistent track records.
Does LAFPP invest with emerging managers?
LAFPP has policies supporting investment with emerging managers, including minority-owned and women-owned firms. The system balances these initiatives with its fiduciary obligation, requiring that all managers meet rigorous investment criteria regardless of firm size or background.
How does LAFPP select and approve new fund investments?
LAFPP's board of fire and police pension commissioners sets investment policy and approves new commitments. The internal investment staff and external consultants conduct due diligence and present recommendations to the board. Managers should engage through consultant networks or direct outreach to the investment staff.
