GLOBAL - Los Angeles County Employees Retirement Association has received 28 responses to its search for real estate debt managers.

The expectation is that the pension fund's board of investments is planning to consider finalist recommendations at its meeting on 9 February and a selection will take place at its meeting on 9 March.

LACERA considering a commitment of as much as $400m (€298m) although the precise allocation has not yet been set.

It is likely that the capital will be committed to a number of firms.  Each manager will have investment discretion if it stays within the agreed investment criteria. The debt investments will be in a separate account structure.

The investment strategy is to provide new debt on real estate backed by existing core assets.  Some of the capital might be used for subordinated debt.

Most of the investments will cover office, industrial, retail and apartments, and the focus will probably be properties in the US.

The pension fund is expecting to achieve at least an 8% IRR on its debt investments.

At the middle of November, LACERA it was 1.7% below its 10% targeted allocation to real estate. This leaves it with up $600m of additional capital to invest in the asset class.

The pension fund currently has $494m of unfunded real estate commitments; its real estate portfolio and commitments remain well within its policy allocation range of 7% to 15% for the asset class.

LACERA has a real estate portfolio valued at $2.97bn. 


 

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