Sacramento County Employees’ Retirement System (SCERS) is to invest cold-storage real estate for the first time.
According to a board meeting report, the pension fund will commit $50m to WCP NewCold III, a fund managed by Westport Capital Partners.
Steve Davis, CIO for Sacramento County, said: “SCERS has been tracking the cold-storage sector for some time and, as secular changes have occurred in food delivery and prepared foods, it has become a greater priority.
“However, cold storage is a specialised property type, requiring operational expertise with limited institutional interest. So we have been waiting for the right investment manager to invest with.”
Last month, IPE Real Assets reported that the New York State Common Retirement Fund had approved a $400m commitment to WCP NewCold III, which is structured as an operating platform rather than a traditional fund.
Davis said: “We will be investing in an operating platform rather than individual assets as is typical of a commingled fund. Cold storage facilities are complex due to the refrigeration systems, life safety equipment and specialised operation and handling needs.
“Owning a seasoned owner, operator and development platform affords to the specialised construction and operational expertise while benefiting from the growth in value of the business.”
The investment will form part of SCERS’s non-core real estate portfolio and the pension fund is targeting net levered returns of 20%.
