UNITED STATES - The real estate investment managers selected to run the California State Teachers Retirement System's (CalSTRS) core real estate programme over the next five years will share a single pool of capital.
The pension fund confirmed that BlackRock, CBRE Global Investors, Clarion Partners, Heitman, Invesco Real Estate, LaSalle Investment Management, JP Morgan Asset Management, The Lionstone Group, Principal Global Investors and Thomas Properties Group would manage assets on a separate account basis.
The 10 firms, selected from a short list of 28, will not have a specific volume of capital to manage but rather they will be allocated capital from a ‘general pool'.
CalSTRS may allocate up to $1bn (€800m) in new capital to its core real estate strategy, comprising commercial and residential real estate in the US, but some of the managers will be managing existing assets only.
The separate account assets - offices, industrial properties, shopping centres, apartments and hotels - are expected to number approximately 200 and have an aggregate net asset value of $3.4bn, roughly 16% of its overall $21bn real estate exposure. CalSTRS is targeting returns of between 7% and 9%.
The investment managers will have ‘discretion within a box' on deals, enabling them to make investment decisions without referring to CalSTRS unless they stray outside established investment guidelines.
The companies were selected after a request-for-proposal process started in April 2011, undertaken by CalSTRS's real estate staff and The Townsend Group.