UNITED STATES - Los Angeles County Employees Retirement Association had added to its international real estate exposure by committing $50m (€32.2m) to the ING Real Estate Asia Value Fund.
John McClelland, principal investment officer for real estate for LACERA, believes this commingled fund offers features which sets it apart from other pan-Asian offerings.
"The commingled fund focuses on value-added investments, which makes it lower in risk than the high return vehicles that are investing in this part of the world. It has an open-ended structure which gives it a liquidity feature not common in Asian funds," said McClelland.
It is projected LACERA will achieve a net IRR of 12-14% through the commingled fund which its manager, ING Real Estate Investment Management, has also made a $50m co-investment.
The fund has a fundraising target of $1bn after which the Asia Value Fund will seek deals in Japan, China, Taiwan and Korea in the immediate term and at a later date will consider additional counties in which to invest in, such as India, Singapore, Malaysia and Thailand.
ING REIM's investment strategy for this fund is to make value-added transactions in office, industrial, retail, residential properties and hotels.
LACERA has now committed $320m into international real estate, assisted by its real estate consultant The Townsend Group, and could invest another $80m into the same strategy.
The pension fund's total real estate portfolio is valued at $4bn - representing approximately 10% of its total plan assets - while its targeted allocation for real estate is 10%.