CalPERS buys interest in real estate manager Bentall Kennedy

NORTH AMERICA - California Public Employees Retirement System (CalPERS) has made a $100m (€80m) investment in Bentall Kennedy for a 33% interest in the company, marking its first investment in a real estate fund manager.

Brad Pacheco, a spokesman for the pension fund, said one of CalPERS' goals with the deal was to leverage Bentall Kennedy's experience in asset management to "help grow our own staff".

He added: "This is the first investment of its type for CalPERS in terms of investing in an investment manager in the real estate sector."

Gary Whitelaw, chief executive at Bentall Kennedy, welcomed having an investor such as CalPERS join his company.

"We began the process in the fall of 2001, when Ivanhoe Cambridge made the decision that it didn't want to be part of our company," he said.

Bentall Kennedy now has three major investor groups. In addition to CalPERS, the other two-thirds ownership is held equally by the British Columbia Investment Management Corporation and Bentall Kennedy's senior management team.

CalPERS' investment means the pension fund will now have two people on the board of directors, although it said it had not yet determined who those people would be.

Meanwhile, Bentall Kennedy will be coming out to market soon with a new fund focusing on medical office buildings. 

The fund will invest in existing office buildings or develop new properties in the US, targeting tenants interested in being located adjacent to or near hospitals. 

"This is an investment strategy we have had success with through one of our separate account relationships, and we think there will be a good interest for this strategy in a commingled fund format," Whitelaw said.

Holiday Fenoglio Fowler, the placement agent, has just begun raising capital for the fund. 

In an email, Pacheco said it was still too early to gauge CalPERS' interest in Bentall Kennedy's new funds.

CalPERS has a real estate portfolio valued at $18bn, comprising 8% of the pension fund's $228bn total investment portfolio.

Bentall Kennedy manages a real estate portfolio valued at $28.7bn, as at the end of March.