UNITED STATES – Los Angles City Employee's Retirement System (LACERS) is planning to invest up to $225m (€175m) in a wide range of real estate strategies over the next three years.
The pension fund, advised by Courtland Partners, intends to invest $25m in core strategies, $30m in value-added, $32m in opportunistic and $20m in global strategies.
Courtland has recommended investing the capital allocated to core in debt strategies, which the consultants argues provides better risk-adjusted returns given the recent rebound in core property prices.
LACERS will focus on value-added strategies that pursue assets from distressed sellers and seek to benefit from value appreciation as asset management activities are completed.
The opportunistic strategies can include equity or debt investments, while any global investments are likely to be value-add or opportunistic in nature.
LACERS will back existing real estate fund managers where they have performed well and their strategies are in line with the pension fund's requirements.
The pension fund is seeking to limit the number of investment managers running its real estate portfolio, but it will consider new companies where they offer exceptional talent and opportunities not represented by its existing roster.
LACERS plans to invest $85m in 2013, $85m in 2014 and $55m in 2015.
The pension fund's real estate portfolio was valued at $705m at the end of 2012, approximately 6% of its total assets.