REAL ESTATE - The £3.6bn (€5.3bn) London Pensions Fund Authority (LPFA) is looking for an external investment manager to expand its £150m real estate portfolio outside the UK.
The portfolio, which up to now has been managed in-house, is currently invested in five UK funds. The new manager will be expected to shift the focus of the portfolio to new – not necessarily European – markets. The tender is for a three-year contract.
"All of our funds have done well but we’ve been wanting to try to do something more international for the past two years," said LPFA investment manager Philip Jones.
"We have a rough idea of the geographic areas we want to cover but it will be up to the manager to advise," he added. "We want to make it as global as it can be, but we’re not interested in investing in specific markets for the sake of it. Their [the manager’s] job is to find value."
The LPFA has so far ruled out increasing the size of the portfolio, which is around 7% of the fund. " It will be the same amount of money, differently invested," said Jones.
He identified tightening of opportunities, lower returns and a fully valued UK market as reasons for the shift.
The LPFA’s move reflects a trend among UK pension funds out of their domestic real estate market. Last month Welsh local authority Powys County Council tendered for a multi-manager to handle £13m of continental European unlisted real estate for its pension fund.
No comments yet