LACERA Sees Benefits as It Leans Into Private Infrastructure, Co-Investments

Why It Matters

LACERA’s results demonstrate how co‑investment strategies can boost pension returns while sharing risk, setting a template for other large funds facing market volatility and inflation pressures.

Key Takeaways

• LACERA allocated billions to private infrastructure this year
• Co‑investment model boosted returns while sharing risk
• Dealflow slowdown pressures future pipeline
• Geopolitical tensions raise cost of capital
• Other U.S. pensions watching LACERA's strategy

Pulse Analysis

LACERA, the Los Angeles County Employees Retirement Association, manages close to $90 billion in assets and has become one of the most active public‑pension investors in private infrastructure. Over the past twelve months the fund deepened its exposure through direct equity stakes and co‑investment vehicles, targeting highways, renewable energy parks, and social‑impact projects. By partnering with seasoned developers and leveraging its capital‑intensive mandate, LACERA aims to capture the ill‑liquid premium that private infrastructure traditionally offers, while diversifying away from volatile equity markets.

The strategy is already delivering measurable results. According to the latest internal report, LACERA’s infrastructure portfolio posted a net internal rate of return (IRR) of roughly 9 percent, outpacing its broader fixed‑income benchmark. However, senior staff caution that a global slowdown in dealflow—exacerbated by tightening credit conditions and heightened geopolitical risk—could compress future entry points. To mitigate these headwinds, the board has tightened underwriting standards, increased reliance on co‑investment structures that spread capital risk, and emphasized ESG‑aligned assets that attract sovereign and corporate capital.

LACERA’s experience signals a broader shift among large U.S. pension plans toward private‑infrastructure co‑investment as a hedge against market volatility and inflation. The fund’s willingness to lock capital for long‑term, revenue‑stable projects may encourage peers to replicate the model, especially as regulators loosen fiduciary constraints on illiquid assets. Yet the success of such approaches will hinge on the ability to source high‑quality pipelines amid geopolitical uncertainty. Observers expect LACERA to continue scaling its commitments, potentially setting a benchmark for pension‑fund infrastructure allocation over the next decade.