Sacramento County backs Och-Ziff, Prologis funds

Related images

  • Prologis

Sacramento County Employees’ Retirement System plans to invest in real estate funds managed by Och-Ziff Real Estate and Prologis.

The pension fund has approved a $35m (€26.2m) commitment to Och-Ziff Real Estate Fund III, which is pursuing a distressed real estate strategy predominantly in the US.

Scott Chan, chief investment officer for the pension fund, said: “The commitment into the Och-Ziff fund was done as this manager has a strong track in making successful counter-cyclical investments in real estate.”

Och-Ziff is seeking to raise between $1bn and $1.5bn for the fund, which will invest in individual assets and portfolios, including properties, loan pools and real estate operating companies. Up to 20% of the fund can be invested outside the US. The fund is targeting gross returns of more than 20%, before tax.

Sacramento County has also approved two $25m commitments to the Prologis Targeted Europe Logistics Fund and the Prologis Targeted US Logistics Fund.

“We made the commitments to the Prologis funds as we were under allocated to industrial assets,” said Chan.

“We could invest more capital in this property type before we reach our allocation level for industrial.”

Both Prologis funds are open-ended and pursue core strategies.

Around 95% of the European fund’s assets are situated near airports or sea container ports of Paris, London, Amsterdam, Frankfurt, Hamburg and Rotterdam. Prologis has a 43.4% stake in the fund.

The US fund invests in major markets, including San Francisco, Southern California, Seattle, New Jersey and Florida. Prologis holds a 25.8% stake in the fund.

Sacramento County intends to sell assets from its separate accounts, which are managed by Cornerstone Real Estate Advisers and BlackRock Realty.

“We think that it makes sense to sell some assets from our separate accounts to take advantage of the near peak values for core assets and re-invest this capital into commingled funds,” said Chan.

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2571

    Asset class: Equities.
    Asset region: US.
    Size: $400m.
    Closing date: 2019-11-14.

Begin Your Search Now