UNITED STATES - Los Angeles County Employees Retirement Association has chosen not to allocate any new capital to real estate for fiscal year 2009 as the fund is now over-allocated to the sector.

"We have a targeted allocation for real estate of 10%. The amount we have actually invested in the asset class is $3.286bn or 11.5% of our total assets," said John McClelland, principal investment officer for real estate for LACERA.

This action - discussed and approved at the pension fund's board meeting on 24 September - represents a big change from a year ago when the pension fund allocated as much as $900m (€616.4m) for fiscal 2008 which could be invested through its separate account managers.

That said, LACERA will not totally turn away from putting capital into real estate.

"We would consider investing some capital if one of our separate account managers brought us a real compelling investment opportunity," McClelland said.

The pension fund currently works with six separate account managers: RREEF, TA Associates, Cornerstone Real Estate Advisers, Capri Capital Advisors and Emmes.

These managers are not holding any capital at this time to invest in the marketplace but LACERA has invested in the four main property types - office, industrial, retail and apartments - with these firms while Cornerstone has an investment mandate that includes hotels.

Over time, the pension fund has placed capital in the core, value-added and high return sectors of the marketplace.

LACERA had total plan assets of $37.8bn in August.