NORTH AMERICA – The Los Angeles County Employees Retirement Association (LACERA) is to launch a new real estate manager search and has ratified a $100m (€75.4m) commitment to the INVESCO Asia Real Estate fund.
The manager search would allocate $200m for each real estate equity manager hired.
John McClelland, principal investment officer for real estate at the pension fund, wrote in a board meeting document that this level of commitment from LACERA would foster a "strong beginning" for a separate account relationship, with the capacity to grow in future under the fund's discretionary model.
LACERA is looking to hire additional separate account managers to provide more manager flexibility.
Combined, three of its existing separate account managers already manage nearly $1bn of LACERA's assets, approaching the investment staff's "comfort level" for maximum allocations.
The pension fund would also like to have another manager under contract should some assets need to be transferred to another manager.
LACERA is planning to hire managers with experience investing in core, value-added and high-return strategies in the US.
Meanwhile, the Asia Real Estate fund, for which LACERA has earmarked $100m, is a new core, open-ended commingled fund managed by INVESCO Real Estate.
The initial capital raise for the fund is projected as $400m, although, according to a pension fund document, INVESCO is anticipating growing the fund to $1bn over the next five years.
The Asia Real Estate fund is one of the first commingled funds in Asia looking to buy core assets. Most of the other investment offerings have targeted value-add or opportunistic strategies.
According to a document written by Townsend, LACERA's consultant, INVESCO has a pipeline of deals lined up for the fund, including two office-building purchases planned in Tokyo and Sydney this year.
