Baltimore City Employees Retirement System (ERS) is redeeming its investment from a core open-ended real estate fund managed by Barings into a fund managed by Clarion Partners.
David Randall, an executive director at Baltimore City ERS, said: “The reason for the movement was underperformance in the core real estate investment strategy.”
Baltimore City ERS holds a $124.9m (€116.4m) investment in Barings Core Property Fund, a fund the pension fund has backed since 2012.
The Barings Core Property Fund recorded a -3.5% return for the past three months and on a fiscal year-to-date basis. The pension fund’s investment has also underperformed for every time period and since the inception of the commitment.
Barings did not respond to a request for comment.
Baltimore City ERS said most of the capital redeemed from the Barings fund will be placed into the Clarion Lion Properties Fund. The pension fund has approved a $120m commitment to Clarion’s open-ended fund.
SEC filing showed that the Clarion Lion Property Fund had a current net asset value of $20.2bn, as of the end of 2022.
The fund has a strategic overweight to industrial assets, a growing exposure to life science properties and no exposure to regional or super-regional malls.
“Our targeted expectation from the Clarion fund is to be above our 7% discount rate,” Randall said.
The $2bn pension fund already holds a $155.8m investment in the American Core Realty Fund, a core real estate fund managed by American Realty Advisors.
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