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Los Angeles County Employees Retirement Association (LACERA)

PRI reporting framework 2020

You are in Indirect – Manager Selection, Appointment and Monitoring » Outputs and outcomes

Outputs and outcomes

SAM 08. Percentage of externally managed assets managed by PRI signatories (Private)


SAM 09. Examples of ESG issues in selection, appointment and monitoring processes

09.1. Provide examples of how ESG issues have been addressed in the manager selection, appointment and/or monitoring process for your organisation during the reporting year.

Topic or issue
          Manager search
        
Conducted by
Asset class
Scope and process

LACERA conducted a search for a global infrastructure manager during the reporting period. All respondents were probed to assess how the managers identify material ESG factors relevant to their investment strategy, be it quantitative or fundamental analysis, and incorporate such factors into portfolio construction. The manager's ESG approach was incorporated into LACERA's overall assessment of manager quality and informed LACERA's ability to monitor the manager's ESG efforts as part of LACERA's manager scorecard.

Outcomes

LACERA hired one global infrastructure manager which is a PRI Signatory and actively and systematically evaluates and integrates ESG factors into its investment process.

Topic or issue
          Manager search
        
Conducted by
Asset class
Scope and process

LACERA conducted a search for a passive global equity manager during the reporting period. All respondents were probed to assess how the managers identify material ESG factors relevant to their investment strategy, be it quantitative or fundamental analysis, and incorporate such factors into portfolio construction. LACERA also assessed the respondents’ broader engagement efforts within passive indices, to assess the extent to which the respondents’ efforts may align with LACERA’s state ESG policies.

Outcomes

LACERA hired one passive global equity manager which is a PRI Signatory and has a robust program to engage and encourage portfolio companies in its passive strategies to abide by high corporate governance standards.

Topic or issue
          Manager search
        
Conducted by
Asset class
Scope and process

LACERA conducted a search for a treasury inflation protected securities manager during the reporting period. All respondents were probed to assess how the managers identify material ESG factors relevant to their investment strategy and incorporate such factors into portfolio construction.

Outcomes

LACERA hired one passive treasury inflation protected securities manager which is a PRI Signatory.

Topic or issue
          Manager search
        
Conducted by
Asset class
Scope and process

LACERA conducted a search for an illiquid credit manager during the reporting period. All respondents were probed to assess how the managers identify material ESG factors relevant to their investment strategy and incorporate such factors into portfolio construction. The manager's ESG approach was incorporated into LACERA's overall assessment of manager quality and informed LACERA's ability to monitor the manager's ESG efforts as part of LACERA's manager scorecard.

Outcomes

LACERA selected one illiquid credit manager that has a process for identifying certain ESG-related investment risks.

Topic or issue
          Manager search
        
Conducted by
Asset class
Scope and process

LACERA conducted a search for a bank loan manager during the reporting period. All respondents were probed to assess how the managers identify material ESG factors relevant to their investment strategy and incorporate such factors into portfolio construction. The manager's ESG approach was incorporated into LACERA's overall assessment of manager quality and informed LACERA's ability to monitor the manager's ESG efforts as part of LACERA's manager scorecard.

Outcomes

LACERA hired one bank loan manager which is a PRI Signatory and incorporates ESG considerations into its underwriting process.

Topic or issue
          ESG and Diversity and Inclusion
        
Conducted by
Asset class
Scope and process

LACERA evaluated numerous potential private equity investments and actively requested information on ESG considerations and management by GPs, as well as diversity and inclusion statistics and policies from prospective GPs.

Outcomes

LACERA actively evaluates prospective GPs on their ESG policies and intergration and investment team diversity and inclusion. This information is incorporated into the evaluation package provided to LACERA's Board of Investments at time of investment recommendation. 

09.2. Additional information.


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