GLOBAL - The Massachusetts Pension Reserves Investment Management Board has selected AEW Capital Management as its fifth core separate account manager.

The pension fund ended its separate account relationship with RREEF in June due to the real estate manager's difficulty in keeping portfolio managers on the account. 

Over a 12-month period, three different people were assigned to the position.

Pension fund officials cited AEW's track record running separate accounts and described the company as a "very strong organisation".

The hiring of AEW includes taking over existing assets previously managed by RREEF, as well as a new allocation for future purchases.

AEW has been awarded the management of eight properties - worth approximately $225m (€161.2m) - previously run by RREEF.

The assets include office, industrial, retail and apartments spread across the US, with four in California and one each in Colorado, New York, Virginia and Pennsylvania.

The RREEF managed portfolio contained a total of 21 assets. The other 13 properties will be split up, with two to four properties being allocated to the other separate account managers: INVESCO Real Estate, TA Associates Realty, LaSalle Investment Management and JP Morgan Asset Management.

Mass PRIM has allocated $175m of equity to AEW for new investments. The total capitalisation for the account will be approximately $350m.

AEW will have full investment discretion on the separate account if it stays within the established investment parameters, allowing the manager to make decisions without the pension fund's approval.

A total of 16 companies responded to Mass PRIM's initial RFP search, including CB Richard Ellis Investors, Cornerstone Real Estate Advisers, Heitman, ING Clarion Partners, Stockbridge and UBS Realty Investors.
 

Topics