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LACERS to exit PRISA II

by Zoë Wolff

The $14 billion Los Angeles City Employees’ Retirement System is planning to redeem its approximately $46 million investment in Prudential Property Investment Separate Account II, according to board meeting documents.

The fund, managed by Prudential Real Estate Investors, is an open-end core-plus fund that invests in U.S. properties, primarily within the office, apartment and retail sectors. LACERS invested $30 million in the fund in 2004.

Advised by The Townsend Group, the pension fund is looking to leave PRISA II due to its performance and management fees. The meeting documents show the fund’s return since inception has been 250 basis points below its benchmark. Effective July 1, 2016, PRISA II’s annual management fee will increase from approximately $421,000 to $539,000.

The exit from PRISA II also will bring LACERS closer to its target of having 60 percent of its real estate portfolio in core investments. PRISA II falls under the

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