UNITED STATES - Los Angeles Fire and Police Pensions are considering investing as much as $300m (€194.1m) in real estate this year as part of its 2008 investment plan.
All of the projected capital will be invested in non-core space as the pension fund believes the opportunities currently lie in the value-added and high-return sector of the marketplace while it is still too early to be investing new capital in core real estate.
These are the real estate markets experts say will be impacted more over the next 12 months, as a result of the poor performance of the economy.
Los Angeles Fire and Police will evenly split the investment capital with its existing separate account managers and placing new capital into commingled funds so the amount invested in each area could potentially be up to $150m.
The pension fund's separate account managers - Sentinel Real Estate Corporation, Urdang Capital Management and Heitman - will all be looking to invest capital into the four main US property types of office, industrial, retail and apartments.
Los Angeles Fire and Police will be looking at moving some capital into new value-added commingled funds either domestically in the or internationally.
Los Angeles Fire and Police currently has a gross real estate portfolio valued at $1.1bn, along with some leverage placed on the portfolio.
The fund has a targeted allocation for the asset class of 9% but its real estate assets amount to approximately 7.2% of its $15.3bn in plan assets.
The pension fund is working on this real estate investment plan with the assistance of its real estate consultant, The Townsend Group.