UNITED STATES - Los Angeles County Employees Retirement Association has increased its international real estate portfolio by committing capital to two new investment funds.
Each investment was for $25m (€18.1m) into the AIG Asian Real Estate Partners II and New City Asia Partners.
John McClelland, principal investment officer for real estate for LACERA, said, "We think that, over time, AIG has shown a solid performance record and has the personnel and offices in place in the markets where it is investing to make the deals happen. Their transactions will let us achieve more diversification within our portfolio.
"We like that the New City fund has a more focused strategy. It will be mostly investing in the Japan residential market, where we believe that the market has already hit its down cycle and is now starting to make a comeback. This puts it at the opposite end of the spectrum when compared to the US residential market."
AIG Global Real Estate Corp is aiming to raise $500m through the Asian Real Estate Partners II fund, marketed as an opportunity fund and expected to achieve a net IRR return of at least 20% for LACERA by investing in properties across Japan, China, Hong Kong, Singapore and South Korea.
New City Corporation, behind the Net City Asia Partners, is looking to raise $1bn for its commingled fund and a net IRR of 18% by placing a 75% weighting in Japan and the remainder in properties in China and South Korea.
At least 50% of the deals for the commingled fund will be on new and existing residential properties, according to LACERA, while other property types in the commingled fund will be office buildings and logistic properties.
The pension fund was assisted in its selection by real estate consultant The Townsend Group.