b'INVESTMENT ENVIRONMENT, CONT.InternationaldevelopedmarketsoutperformedU.S.declines, with gains driven primarily by stable income equities for the fiscal year, with the MSCI EAFE Indexreturns and early signs of valuation recovery. Publicly returning 18.33%, supported by a weakening U.S. dollartraded real estate was up 8.60% as measured by the andfiscalstimulusinEuropeandJapan.EmergingFTSE NAREIT All REITs Index.markets also delivered strong results, with the MSCI Emerging Markets Index gaining 15.97%, led by SouthDuring fiscal year 2025, private equity markets showed Korea, Taiwan, and India.improvement following a period of subdued activity. The environment became more favorable as inflation Core fixed income markets experienced positive resultspressureseased,interestrateexpectationsshifted, for the fiscal year. The Bloomberg U.S. Aggregate Bondand credit conditions became more supportive. These Index returned 6.08% overall, but experienced a sharpdevelopments contributed to a pickup in transaction decline of -3.06% in Q4 2024 due to rising long-termvolume and a more constructive backdrop for exits, yields.Itreboundedinsubsequentquartersastheparticularly in the latter part of the year.yield curve steepened and credit spreads tightened. The 10-year Treasury yield ended the year at 4.24%,Although macroeconomic uncertaintyincluding trade reflectinginvestorconcernsoverfiscaldeficitsandpolicy shifts and market volatilityposed challenges geopolitical risks. early in the year, investor sentiment improved as the outlookbecameclearer.Activityintheventureand Other credit markets also performed well, with highgrowth segments was especially notable, with several yieldbondsreturning10.29%fortheyear.Emerginghigh-profile public listings and strategic sales helping market debt rallied, particularly local currency bonds,to restore momentum.which returned 13.81%, aided by a weaker U.S. dollar.In this context, the LAFPP Private Equity Portfolio deliv-Coreprivaterealestatedeliveredapositivereturnered a net internal rate of return of 8.30% for the fiscal of 3.54% for the fiscal year ending June 30, 2025, asyearendingJune30,2025,reflectingsolidperfor-measured by the NFI-ODCE Index (gross of fees). Thismance amid a gradually recovering market landscape.marks a notable shift after a prolonged period of price 98 LAFPP ANNUAL REPORT 2025'