Pennsylvania SERS replaces real estate managers on separate accounts [corrected]

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Pennsylvania State Employees’ Retirement System (SERS) has removed Lowe Enterprises Investors from two of its real estate separate accounts, worth a combined $1.2bn (€1.0bn).

The pension fund told IPE Real Assets it had hired LaSalle Investment Management and Hotel Asset Value Enhancement (HotelAVE) as replacements, but did not comment on the reasons behind the move.

LaSalle, which already manages an $801m separate account on behalf of Pennslyvania SERS, will take over a portfolio of offices and apartment complexes on the East Coast of the US.

The portfolio being taken over by HotelAVE consists entirely of hotel properties. It will be the first time Pennsylvania SERS has hired HotelAVE.

Jason Kern, the CEO of LaSalle Americas, said: “We are pleased to expand our 24-year partnerships with SERS and are honoured by their vote of confidence in LaSalle, after a competitive selection process, to manage this important segment of their US real estate portfolio.

“Given our wealth of experience with these types of assignments, we feel confident that our team and our investment process, with an emphasis on active management and disciplined hold/sell analysis, will allow us to maximise investment returns on behalf of SERS and its beneficiaries.”

Pennsylvania SERS also said it could spend up to $600m on real estate as part of its 2018-2019 investment plan – to help the pension fund reach its long-term target allocation of 12%, from the 8% exposure it had at the end of 2017.

An earlier version of this story misstated the combined worth of the separate accounts

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