The Los Angeles County Employees Retirement Association (LACERA) is aiming to invest $1.5bn (€1.08bn) in real estate markets in the second half of 2014 and the first six months of 2015.
The pension fund also plans to sell property assets worth $710m during the period, resulting in a net investment of $793m during its next fiscal year.
According to board meeting documents written by John McClelland, principal investment officer for real estate, the intention is to position LACERA to be able to react quickly to opportunities identified by its fund managers across different strategies.
The investment team have proposed allocating $300m of new capital to four of its separate account managers: Invesco Real Estate, TA Realty, Deutsche Asset & Wealth Management and Capri Capital.
Separate account managers Cornerstone Real Estate Advisers and Emmes Asset Management Company are on LACERA’s watch list and are therefore not permitted to make new investments.
The strategies pursued by its separate account managers are a combination of core, value-added and high-return.
LACERA has more capital to put out with three managers it hired in May 2013: Clarion Partners, Heitman and Stockbridge. Each was allocated $200m and the total amount of equity left to be invested is $171m.
The pension fund will be investing some capital in debt through its existing allocations with Cornerstone and Quadrant Real Estate Advisors.
LACERA is unlikely to invest via funds. The pension fund stated in a board meeting document that no new commingled fund investments would be considered unless they were particularly compelling.
LACERA will begin the fiscal year with a real estate portfolio valued at $4.7bn. This puts it at 10.2% of its total plan assets and within its 7% to 15% policy range all for the asset class.