The Los Angeles County Employees Retirement Association (LACERA) is weighing $720m (€641m) in new global real estate commitments as part of its 15% target allocation for the sector.
The planned capital deployment would be $300m for Europe, $345m for Asia and $75m for Latin America.
The US pension fund is considering commitments for the next three years, according to a board-meeting document.
The action was discussed at LACERA’s 14 September real estate committee meeting, with approval pending a full board meeting in future.
The new capital would allow the pension fund to move its international real estate exposure from its current level of 5.7% to 15% over the next three years.
LACERA said it was looking to diversify away from the US and planning to invest all capital in closed-end and open-ended funds.
The investment strategy for Europe and Asia could be either core or non-core.
Any capital invested in Latin America would be non-core.
The estimated commitment per fund would be $50m for Europe and Asia, and $25m for Latin America.
LACERA’s board-meeting document provides return expectations for Europe and Asia, as well as for core and non-core on a net, levered basis.
In Europe, core is 5-6% and non-core 6-13%.
Asia, excluding Australia, is 7-9% for core and 7-14% for non-core.
Loan-to-value components on the strategies is 30% for core and 50% non-core.
The pension fund now has a total amount invested in international real estate of $323m, with $194m in Europe, $118m in Asia and $11m in Latin America.