LACERS BOARD UPDATE
By Michael R. Wilkinson, LACERS Commissioner
Email: MikeWilkinson4LACERS@gmail.com
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ow is the time to look back at last year’s calendar and see how LACERS’ investments performed against its benchmark. The investment results are mixed, with the fund exceeding the benchmark return for three years and five years while trailing the benchmark in other time periods.
The reports, prepared by NEPC, our investment consultant, are accurate as of Dec. 31, 2024. The fund returned minus-2.22 percent net of fees for three months; minus-7.36 percent for one year; 1.73 percent for three years; 6.55 percent for five years; 6.96 percent for 10 years; 6.84 percent for 20 years; and 6.84 percent since inception (July 2001).
Note that for the one-year period, the fund returned more than the seven percent assumed rate of return, while the 20-year and since-inception figures were close to meeting the assumed rate of return.
As you know, LACERS is a long-term investor, and our goal is to meet our long-term assumed rate of return, which is currently seven percent. There will be times when we are over that assumed rate and times when it will be less than the assumed rate. There will be times when the investment returns are negative.
Finally, NEPC reported on the 10-year returns on two private markets asset classes, private equity on an Internal Rate of Return basis and the real estate allocation on a time-weighed return basis. The overall aggregate performance for private equity was 13.0 percent, beating the private equity blended benchmark of 12.9 percent with the core portfolio returning 13.5 percent, while the specialized portfolio returned a negative 1.5 percent. The real estate portfolio returned 5.3 percent, trailing its benchmark of 6.0 percent.
