San Bernardino County eyes funds to maintain core property exposure

San Bernardino County Employees’ Retirement Association is expected to direct $140m (€134m) of new capital to real estate next year.

The pension fund’s real estate pacing plan for 2017, which will be voted on at a board meeting on 5 January 2017, could see $80m allocated to core investments.

San Bernardino County, which is being advised by consultants NEPC, is seeking to ensure at least 50% of its real estate portfolio is made up of core investments and so is likely to look at multiple funds.

Chief investment officer Donald Pierce said: “I would be very surprised if we don’t place capital into more than one core commingled fund.”

The pension fund has been selling down a separate account managed by American Realty Advisors, the proceeds of which could go to new core fund investments.

It is expecting to receive approximately $75m in distributions when one of the three remaining assets in the $193m portfolio is sold in 2017.

“When you only have three assets in a separate account, it makes a lot more sense from a diversification standpoint to invest capital into a core commingled fund,” said Pierce.

The pacing plan means $60m could be invested in non-core real estate in 2017, either through funds or co-investments.

As part of the plan, NEPC has recommended making $25m commitments to Partners Group, Apollo Global Management and Invesco Real Estate, including co-investments alongside the Invesco Asia Core Fund.

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