AW Investor Scorecard Tracks Billions in LP ActivityFeb5

By Susan Barreto, Editor of Alternatives Watch

Pension funds have kicked off 2021 with a flurry of alternative investment activity with January investor mandate activity totaling $3.3 billion, according to the Alternatives Watch Investor Scorecard.

The largest mandate was from the Teachers’ Retirement System of Texas, which placed $600 million with Invesco Advisors for its latest real estate fund. 

The average alternative investment allocation for the month was $114 million. 

By comparison with activity logged in the last two months of 2020 that combined had $14 billion in investor commitments, January may have seemed sluggish and yet a quick glance on allocator’s plans for 2021 reveals pent up demand in the space.

For example, the $64 billion Los Angeles County Employees’ Retirement Association (LACERA) is boldly building up its emerging manager portfolio with potential allocations to hedge fund, private equity, illiquid credit and real asset firms.

Currently LACERA has emerging manager programs within its global equity, private equity and real estate programs. But in December, trustees approved a hedge fund sleeve within the successful initiative that dates back two decades.

The $250 million emerging manager hedge fund program was approved to have a separate account feature to be overseen by Stable Asset Management and will be built out over the next 12 to 24 months.  The overall hedge fund program totals roughly $2 billion currently.

Within the already established private equity emerging manager program sleeve, an RFP is expected to launch in 2021 with a separate account structure.

In the second quarter of this year, an illiquid credit team at LACERA will evaluate the optimal implementation strategy. The estimated time frame for a formal program launch, to be housed within the fixed income emerging manager program, has been set for no later than 2022.

Also a move into real assets is an opportune area for emerging manager investment, officials said as newer managers will be considered for new private investments there.  Planning for this part of the program is currently underway, according to a presentation made by Jonathan Grabel, CIO for LACERA. In turn, the board recently selected StepStone Group as its real estate investment consultant, which was chosen in part for its ‘large, diverse and seasoned’ team of real estate professionals.

Below follows our top 10 allocations from our monthly scorecard activity: