REAL ESTATE - The Los Angeles County Employees Retirement Association will be looking at making some international real estate investments over the next 12 months.
Its Principal Investment Officer for Real Estate John McClelland said, "We will be starting this process at some point next year. We are not in any rush to invest the amount of capital we have established for this part of our real estate program."
The pension fund has allocated that up to 10% of its real estate portfolio for international investing. This means there is a total of $350m that could be invested.
The most likely way to invest this capital would be with commingled funds. This is how most pension funds have invested on an international basis. One of the few direct real estate separate accounts with an international strategy was created last year by the San Francisco City and County Employees’ Retirement System and Capmark Investments for properties in Asia.
LACERA will be working with its real estate consultant, The Townsend Group, on this assignment. Either the consultant or the pension fund manager could suggest commingled funds that could be considered for a possible investment.
The commingled funds could be a mixture of either core or non-core investment funds. These strategies could vary both by the property type being considered and the investment risk that is involved.
LACERA could be investing on an international basis in a different way. McClelland said, "We may consider investing internationally by placing some capital into international securities. There has not been any decision by us as to how much of the international allocation could be invested this way."