LAFP management fees to increase 10.3%

The Los Angeles Fire and Police Pensions has reported a 10.3 percent increase in management fees bringing them to $100.6 million for the upcoming fiscal year.

The pension fund’s private equity management fees are budgeted at $34.2 million for 2017-18, up $3.07 million, across four funds, according to its latest budget report. Private equity fees are 34 percent of LAFP’s management fee expenses.

Real estate fee expenditure stands at 23.9 percent, or $24.03 million in monetary terms.

“These investment management fees are reasonable and in line with the growth in the portfolio,” the report concluded.

A recent study by financial services firm bfinance revealed private equity and infrastructure fees have remained intransigent due to the limited number of institutional-quality deals. There is too much money chasing a few good managers, the report said.

But investment management fees are a contentious topic for many institutional LPs and managers, in terms of value for money. Lawmakers in New Jersey recently tabled a bill legally requiring the state’s New Jersey State Investment Council to disclose the management fees it pays.