The Los Angeles Fire and Police Pensions (LAFPP) has approved a restructuring that would eliminate the 2 percent target allocation to commodities and reallocate it to infrastructure.
The board’s general investment consultant, RVK, recommended the shift in June, and LAFPP approved it during its Aug. 15 meeting.
RVK suggested the current commodities stock exposure does not align with the initial investment thesis of commodities being an inflation hedge, and that investing in infrastructure may provide the plan higher expected returns in periods of stable and falling inflation and would have a lower correlation to public equities.
