UNITED STATES - Los Angeles City Employees' Retirement System has decided to allocate $200m (€127m) to $220m into real estate as part of its real estate annual plan for 2008.
The pension fund decided at its May 13 board meeting, with the assistance of its real estate consultant, Cleveland-based Courtland Partners, none of this capital will be invested in core real estate.
Instead, the allocation will be made to a mixture of debt investment funds, value-added domestic and global funds and global REITs.
The pension fund believes there are more investment opportunities in these areas than in traditional core real estate.
Los Angeles City has investing in global REITs as one of its strategy recommendations for 2008 so is now considering working with European Investors and RREEF, though it has yet to decide how much capital might be allocated for this area.
Los Angeles City is also looking at investing in a wide variety of commingled funds, from Five Arrows Realty Securities V, Lehman Brothers Real Estate Partners III, LaSalle Mexico Fund I, TA Realty Fund IX and Walton Street Real Estate Fund VI.
Los Angeles City is also evaluating some potential new investment strategies for the future, such as infrastructure and timber.
The pension fund has a real estate portfolio valued at $592m, as the end of April. This amounts to 5.4% of the investor's total plan assets of $10.9bn.