GLOBAL - The Los Angeles County Employees Retirement Association (LACERA) has approved its real estate investment plan for the 2010-11 fiscal year, provisionally earmarking $350m (€277m) for investment.

Pension fund officials said they expected to split the potential investments in two scenarios.

According to the investment plan, $250m of the capital may be allocated to the pension fund's existing separate account real estate managers, while the other $100m could be invested into a commercial real estate debt strategy. 

LACERA said it was looking to conduct a Request for Information search next month, adding that it would only pursue this strategy if managers were hired after the search was completed.

The association said the pension fund remained below its targeted allocation to real estate and that it was interested in new opportunities, with a priority on core and lower-risk investments.

To date, the pension fund has invested 8.8% of its total plan assets in real estate - the targeted asset allocation is 10%.

The final allocation to each separate account manager has not yet been determined. 

RREEF, TA Associates Realty, INVESCO Real Estate, Cornerstone Real Estate Advisers, Emmes Asset Management and Capri Capital Advisors each manages separate accounts for the pension fund.

LACERA said it preferred the separate account structure principally for the control and flexibility it gives the investor. 

All of the managers it works with are awarded full investment discretion if they stay within the parameters of the pension fund's approved manager investment plan.

LACERA does have a sizeable amounted of unfunded commitments to real estate, which, through the end of May, totaled nearly $500m. 

The pension fund said it expected managers to call down approximately half that amount during the fiscal year, while the remainder is likely to be called in the following fiscal year.
 

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