NORTH AMERICA – The Los Angeles County Employees Retirement Association has approved new contributions to real estate totalling $400m (€296m).
One part of this is a $100m commitment into the City View Southern California Fund II.
The commitment by LACERA amounts to 50% of the projected total capital raise for the commingled fund.
The other $100m of equity could be funded by an additional 2-4 investors.
City View is the manager of the commingled fund and will co-invest up to $4m.
The targeted return is a 14-16% net IRR.
Distributions will be subject to a 10% preferred return to the investors.
LACERA has put in two stipulations for its commitment, according to a pension fund document.
One is that if City View raises less than $50m from other investors over the next 12 months, the commingled fund will not accept any other commitments, and Fund II will become a fund-of-one, with LACERA being the only investor.
If City View raises more than $50m from other capital sources over the time period, LACERA will match the cumulative commitment amount from the other investors up to the $100m level to remain at a 50% pro rata share of the fund.
The investment strategy is to identify, develop and finance a mixture of new construction and redevelopment of multi-family rental housing in Southern California.
The targeted investment areas would be the metropolitan markets of Los Angeles, Orange County and San Diego.
LACERA's other contribution is $300m to be placed into the pension fund's single-family housing programme.
This will enable the pension fund to retire its existing line of credit for the programme, account to a pension fund document.
The housing programme is currently managed by TriPacific Capital Advisors and is now in liquidation, which the pension hopes to be completed by 2016.
The market value of LACERA's investment in the programme as of the end of June had fallen by $133m.