UNITED STATES - Orange County Employees Retirement System isnowworking on a search to hire new commingled fund real estate managers.

The initial amount available for the search is $46m (€29.6m) as this is the remaining capital the pension fund can invest in real estate before it reaches its 10% targeted real estate allocation.

Orange Countyis considering bringing in four finalists for a private marketcommittee meeting during the summer: AEW Capital Management, ING Clarion Partners, Morgan Stanley Real Estate and Pramerica Real EstateInvestors.

A final decision on the two firms hired will be made later this year and Orange County will be working on the final outcome with the assistance of its consultant, Callan Associates.

The current search is the first action the pension fund has taken since it made a decision in January to only invest in commingled funds going forward.

Orange County believes the commingled fund structure allows for greater diversification and gives managers better access to the primary real estate markets when investing through a commingled fund.

The pension fund is eventually planning to sell all of its separate account assets managed by CB Richard Ellis Investors and American Realty Advisors and valued at $524m to the end of 2007, and re-invest the sales proceeds in commingled funds.

Properties in these accounts are a combination of office, industrial, apartments and retail across the US in markets like California, Texas, Illinois,Florida and Virginia.

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