L.A. Guns and Hoses Fund Talks REITs
April 2, 2009
The Los Angeles Fire & Police Pensions (LAFPP) approved recommendations made regarding its REIT managers at a meeting last week. The recommendations, made by staff and real estate consultant, The Townsend Group, included that the board allow its contract with Adelante Capital Management to expire.
Tom Lopez, CIO with the $10.8 billion plan, said that the decision was made due to the manager’s "disappointing performance."
Documents on the LAFPP Web site, indicate that Adelante's performance has been disappointing on an absolute basis and when compared to the plan's other U.S. REIT managers. The assets from the Adelante portfolio will be awarded to Principal Global Investors, another of the plan's U.S. REIT managers.
Michael Torres, CEO at Adelante, declined to comment on the system's decision.
The board also followed suggestions that it renew its contracts with Principal Global Investors and Morgan Stanley Investment Management for an additional three years. The LAFPP staff is happier with the performance of these two firms, though Morgan Stanley will be watched for its poor performance record in 2008, the documents noted.
The three REIT managers oversee $70 million each.
According to the January 2009 monthly report on the LAFPP's Web site, the plan has a 10.1% allocation to real estate.
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