UNITED STATES - There is new pension fund capital in the United States being moved into entity level investing in both the private and public real estate sectors.

There had been a lot of pension capital in the United States for entity level investing in the last couple of years but Pennsylvania Public School Employees Retirement System and Los Angeles Fire & Police Pension System are the latest to make the shift, despite recent pressures on the market.

Entity level investment has changed in the past few months, with the dislocation in the credit markets, as many of the entity deals counted on high amounts of leverage, which in many cases is no longer available.

This, however, gives all-cash pension fund backed investment funds a really strong investment opportunity so Pennsylvania Public Schools has committed $100m (€70.2m) and Los Angeles Fire and Police $30m to the Rothschild Five Arrows Realty Securities V fund as it is projected to achieve a net IRR of 12% to 15%.

Although these commitments were approved by the pension funds at their board meetings last month, this is the first time these investors have placed some capital into entity level investing.

There is no leverage on the fund, so it would not be affected by recent activity in the debt markets, and assets are being used to make entity level investments in up to nine public or private real estate companies.

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