UNITED STATES - Los Angeles County Employees Retirement Association has approved a $25m (€16.9m) commitment into the Europa fund III commingled fund, which is also expected to contribute to Nordic and Swiss property deals.
John McClelland, principal investment officer for real estate for LACERA, said the body chose to invest through Europe Capital because officials believe strongly in the management capabilities of the London-based firm.
"The company has an experienced team of professionals that have a good record of solid investment performance. We like that they have several existing relationships with operating partners in all of the countries that it does business in. This leads to strong deal flow," said McClelland.
Europa has so far raised €800m in equity on the opportunistic fund which has 75% leverage and is therefore expected to achieve a net IRR of 20% on LACERA's commitment.
Investments in the four main property types of office, industrial, retail and residential will be located in European Union countries but which will also include Norway and Switzerland, through local operating partners.
Perhaps more importantly, LACREA made this commitment as part of its 10% allocation to international real estate established a couple of years ago. At that time, around $350m of capital was available to invest in the strategy but the pension fund has now made commitments in international real estate commingled funds totaling $170m.
Part of this international strategy was to consider investing some of this capital into a global REIT strategy and a search is now underway so a further $120m can be allocated.
LACERA will discuss the global REIT search at its two board meetings in February.