UNITED STATES – Sacramento County Employees’ Retirement System is considering expanding its real estate portfolio by acquiring core assets via separate accounts while also re-investing capital in value-add and opportunistic funds.
Cornerstone Real Estate Advisers and BlackRock Realty, the pension fund's existing separate account managers, are most likely to benefit.
Scott Chan, chief investment officer of Sacramento County, said: "We have somewhere in the neighbourhood of $100-150m (€77.3-116m) of equity we could invest with our two managers in the future."
The two separate accounts cover office, industrial, retail and apartments sectors. The pension fund recently made a $10.8m purchase of an industrial building in Houston.
"Our separate account core real estate portfolio has outperformed the NCREIF Open-End Diversified Core Equity Index by approximately 200 basis points per year," Chan said.
Sacramento County is also selling some of its existing core portfolio and may re-invest the capital in commingled real estate funds.
The pension fund is reviewing its indirect strategy with its real estate consultant The Townsend Group.
It currently has stakes in the Cornerstone Patriot Fund and the BlackRock Granite Fund, and new fund investments are likely to be targeted at value-add and opportunistic strategies.
Sacramento County will be working on this with its new real estate consultant, The Townsend Group.