Sacramento County Employees’ Retirement System (SCERS) is monitoring its investments in Chinese real estate after The Carlyle Group recently revealed plans to spin off its Asian real estate business.
The pension fund, which has three commitments to Chinese real estate strategies managed by Carlyle, is putting the fund manager on watch, according to a board meeting report.
It has committed $10m (€8.77m) to the value-add fund Carlyle China Realty, and has committed $40m to another entity called Carlyle China Project Rome Co-Investment, both of which are at early stages of their investment periods.
SCERS said the Carlyle team would continue to manage the investments as a sub-advisor.
A Carlyle spokesperson said: “Spinning out our China Real Estate team into a standalone business will help ensure continuity and optimal returns for our investors.”
Earlier this year, Jason Lee departed his position as head of Asia real estate at Carlyle, and Han Chen became head of China real estate.
”Han Chen and his team will continue to manage the assets, and Carlyle will still be the ultimate decision maker and hold a significant equity stake in the investments,” the spokesperson said.
According to industry sources, Carlyle could continue to make investments in Asia, although these are expected to be restricted to large platform transactions worth over $200m.