LACERA sets aside $875m for real estate investment

The Los Angeles County Employees Retirement Association (LACERA) is planning to invest up to $875m (€817.5m) as part of its real estate investment plan for the 2015-16 fiscal year.

The pension fund discussed the plan at its 8 April real estate committee meeting.

The plan will be brought to a 10 June board meeting for approval.

LACERA said its investments would be separated into three areas, with up to $550m for a separate account equity investment, $200m for a separate account debt investment and an estimated $125m in new fund commitments.

Staff are reviewing international fund opportunities that offer attractive risk-adjusted returns and would help increase exposure outside the US, including funds targeting real estate in Europe, Asia and Latin America.

The pension would also consider one fund commitment that focuses on US real estate.

The $100m investment would see the manager drawing down 50% during the fiscal year.

The plan for this commitment would be for a fund focusing on a property type inaccessible via the current separate account managers LACERA has.

The equity separate account capital will be split between two groups of managers.

An allocation of up to $400m will be made available to Capri Capital, Deutsche Asset & Wealth Management, Invesco and TA Associates.

Of this amount, up to $250m is reasonably projected to be deployed during the fiscal year in core, value-add or high-return investments.

There will be another $300m made available to separate account managers hired in 2013. 

Clarion Partners, Heitman and Stockbridge would each receive an additional $100m to be invested in core and non-core opportunities.

LACERA is considering a separate account debt investment through its current managers or by diversifying and adding one or two more debt managers to implement a bridge loan strategy.