UNITED STATES - Los Angeles Employees Retirement Association (LACERA) has effectively doubled its capital allocation to existing separate account real estate managers and plans to increase its exposure to international property markets.
The pension fund has allocated $600m (€484m) to its domestic separate account managers, which manage core, value-added and opportunistic real estate strategies on its behalf, up from $300m the previous year.
According to John McClelland, principal investment officer for LACERA, the doubling of capital was based on the belief that there are now more market opportunities and because the pension fund wants to achieve its 10% target real estate allocation.
McClelland said the capital would become available to the investment managers - which could include Cornerstone Real Estate Advisers, Capri Capital, Invesco Real Estate, TA Realty and RREEF - on a ‘first-come, first-serve' basis.
LACERA is also looking to hire additional real estate managers for separate account business.
The pension fund also made two new allocations for real estate debt strategies, allocating $200m to Cornerstone Real Estate Advisers and $100m to Quadrant Real Estate Advisors.
LACERA has also earmarked $400m to commingled real estate funds in the US, potentially including investments in the medical office and student housing sectors.
The pension fund has also allocated $400m for international real estate fund investments in Latin America, Europe and Asia. It has allocated a further $100m for co-investments and will be conducting a search for independent real estate advisers.
LACERA had an real estate portfolio of €3.8bn as of March 2012, representing 9.8% of total assets under management, within its target range of 7-15%.