b'LOS ANGELES FIRE AND POLICE PENSION SYSTEM NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 AND 2023NOTE 7CASH, TEMPORARY INVESTMENTS, AND OTHER INVESTMENTS (Continued)Custodial Credit RiskFor deposits, custodial credit risk is the risk that, in the event of a bank failure, the Systems deposits and collateral securities in the possession of an outside party would not be recoverable.Deposits are exposed if they are not insured or are not collateralized.As of June 30, 2024 and 2023, the Systems exposure to custodialcreditriskcomprisedofforeigncurrenciesheldoutsidethecustodialbankamountedto $28,129,623 and $14,071,365, respectively. For investment securities, custodial credit risk is the risk that, in the event of the failure of the counterparty, the System will not be able to recover the value of its investment or collateral securities that are in the possession of an outside party.Investment securities are exposed to custodial credit risk if they are not insured, or are not registered in the Systems name, and held by the counterparty.As of June 30, 2024 and 2023, the Systems investments in publicly traded stocks and bonds were not exposed to custodial risk since they are all held by the custodian and are registered in the Systems name.As of June 30, 2024 and 2023, theprivateequityof$5,959,526,484and$5,584,945,807,andcommingledrealestatefundsof $1,164,716,266 and $1,102,561,238, were exposed to custodial credit risk, respectively. Concentration of Credit RiskConcentration of credit risk exists when the System has investments in a single issuer totaling 5% or more of the total investment portfolio.As of June 30, 2024 and 2023, the Systems investment portfolio contained no such concentrations.Securities issued or guaranteed by the U.S. Government are exempt from this limitation. Interest Rate RiskInterest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.The System manages its exposure to interest rate risk by requiring a fixed income investment manager to maintain the effective duration of their portfolio within a specified range of (1) the Bloomberg US Aggregate Bond Index for core fixed income investments, (2) the Bloomberg US Mortgage Backed Securities Index for mortgage backed investments, (3) the Bloomberg US Government/Credit Long-Term Bond Index for long duration investments,(4) the B of A ML High Yield Master II Index for high yield investments (5) the Bloomberg US Treasury TIPS 1-5 Years Index for inflation-linked investments, and (6) a blend of the Bloomberg Global Aggregate Credit Index USD, ICE B of A ML Developed Markets High Yield Index USD, JP Morgan Emerging Markets Bond Index Global Diversified USD and Credit Suisse Leveraged Loan Index for global credit investments.The longer the duration, the greater the sensitivity to interestratechanges.InformationaboutthesensitivityoftheSystemsinvestmentstointerestrate fluctuations is provided in the following table that shows the weighted average maturity of the Systems fixed income investments by investment type.41 58 LAFPP ANNUAL REPORT 2024'