UNITED STATES - Oregon Public Employees Retirement Fund has terminated a real estate investment trust (REIT) relationship with Cliffwood Properties LLC and signed deals with three other managers to diversify its risk.

The former $70m (€54.2m) separate account REIT relationship will now be transferred to LaSalle Investment Management as pension fund officials were notified in December 2008 Cliffwood wanted to move away from managing real estate assets for pension funds.

The domestic REIT relationship had been in place with Cliffwood since August 2001 and had contributed a REIT portfolio worth $550m to Oregon PERF through a mixed and global REITs strategy.

The amounted managed by LaSalle for the pension fund is $215m, the other REIT managers being Oregon PERF includes Cohen & Steers and Morgan Stanley.

But the pension fund has decided to invest up to $10m of new capital into the Fortress Fund III commingled fund, pending signing of the final documents.

This new investment is part of $80m that The Fortress Group is trying to raise from existing investors to Fund III to cover some debt issues it is having with the commingled fund.

Oregon PERF made a $125m investment in Fund III in 2004 and pension fund officials they have been pleased with the performance of the commingled fund the manager's ability to run the commingled fund.

Oregon PERF also approved a commitment of up to $21m into the Western National Realty Fund II at its January board meeting, as part of the 9% of capital which had been invested by Lehman Brothers into the fund. Western National is asking its existing investors if they would be interested in covering a portion of the Lehman Brothers commitment.

Oregon PERF initially made a $100m commitment to the commingled fund in 2007, to invest in Western US.

A smaller move has also been made by the pension fund to invest up to $5m into the Starwood Capital Hospitality Fund II, following its initial $100m commitment in Starwood's hotel management company in 2005.

Pension officials think there will be some good buying and management opportunities for hotels on a long-term basis.

Oregon PERF is one of the few pension funds that remains close to its targeted allocation to real estate as it had a real estate portfolio valued at $5.28bn by the end of 2008 and a targeted real estate allocation of 11%. So was only just over it at 11.7% .

Its total assets under management amounted to $45.8bn.