Orange County Employees Retirement System (OCERS) is to redeem its investment from a property fund managed by ASB Real Estate Investments valued at $169m (€151m).

Last year, IPE Real Assets reported that the $15.87bn pension fund had its investment held in the core ASB Allegiance Real Estate Fund on a watch list for underperformance and was planning to redeem its capital.

OCERS committed $110m to the fund in 2013.

In a board meeting document, OCERS said it has=d submitted a full redemption to ASB for the quarter ending on 30 June.

The capital taken out of the Allegiance fund will be mostly re-invested in other funds.

The decisions were made under the advice of its consultant The Townsend Group, which said the ASB fund had underperformed the NFI-ODCE benchmark in all time periods during which OCERS was invested.

It made a one-year return of 6.8% versus the benchmark of 7.4%, a three-year return of 5.2% (versus 7.3%), a five-year return of 8.8% (versus 9.4%), and a return of 9.8% since the second quarter of 2013 (versus 10%). Townsend said this performance placed the fund in the bottom quartile of the ODCE Index.

Townsend said the underperformance by the fund was partly due to the low level of leverage used by the fund.

According to sources, the Allegiance fund generated a total return of 2.01% in the first quarter of this year, beating the 1.42% recorded by ODCE Index during the same period.

The performance was the result of strong leasing activity and gains in rental rates across most of the fund’s investment markets and sectors.

ASB did not respond to a request for comment.