The Orange County Employees Retirement System is considering three potential real estate fund managers as it sells down its REIT portfolio.

The US pension fund, which is moving capital out of foreign REITs and into private real estate funds, wants to place capital in funds where value can be created through leasing, selected re-development, repositioning and other activities.

Orange County’s real estate consultant RVK identified Westbrook Partners’s Fund X, Northwood Investors’s Series VI and Brookfield Asset Management’s Strategic Partners II vehicles as potential funds in which to invest.

The pension fund could invest up to $225m (€209.5m) in real estate in 2015-16.

At least part of the capital will come from the redemption of a REIT separate account managed by BlackRock.

The pension fund wrote in a board meeting document that the rationale for the redemption was to remove equity market volatility surrounding REITs.

The current value of its REIT account is approximately $110m.

The benchmark for this account is the Developed ex US Real Estate Index Fund.

The REIT allocation is expected to be redeemed over a 12-24 month time period.

Westbrook Partners is targeting a $2.5bn capital raise for Fund X, which will invest mainly in the US and Europe.

Northwood Investors has structured its Series VI as a value-add, hybrid closed-end/open-ended fund.

The fund will invest in all property types, as well as some platform investments.

Brookfield is seeking a $7bn capital raise for its Real Estate Partners II, a global opportunity fund targeting the US, Brazil, Australia and Europe.