GLOBAL – The California Public Employees Retirement System (CalPERS) has allocated more capital to its Chinese real estate strategy after ARA Asset Management successfully deployed $300m (€224m) on its behalf.
CalPERS had already committed $500m to China Investment Partners, its single-investor fund managed by ARA, but has increased this to $830m, according to ARA.
John Lim, ARA Group CEO, said the company appreciated "the continued endorsement from CalPERS".
China Investment Partners is a 10-year life fund, but it includes two six-year extensions, potentially giving it a lifetime of up to 22 years.
The arrangement reflects CalPERS's intention to gain a long-term exposure to Chinese real estate rather than seeking to time the market by investing through opportunistic strategies.
The fund is targeting core-plus investments in China's main gateway cities, including Hong Kong.
According to Mark Chu, director for group business development at ARA, the volume of capital committed by CalPERS is potentially "replenishable" subject to market opportunities and ARA being able to deploy capital.
CalPERS previously invested in ARA's pan-Asian real estate funds, ARA Asia Dragon Fund I and ARA Asia Dragon Fund II.
Lim added: "Our private funds division has grown from strength to strength, and it will continue to attract global institutional capital. While the global economy remains vulnerable to slower growth as re-balancing adjustments continue, we remain confident in Asia’s economic fundamentals and longer-term growth prospects."
CalPERS declined to comment.