UNITED STATES - Sacramento County Employees' Retirement System has put plans to conduct a new manager search on hold until at least the first quarter of next year.

The pension fund had planned to conduct a search so it could place $75m (€58m) in three value-added commingled funds over the coming month.

However, that plan has been postponed, and plan will not be discussed until at least February 2009, according to Jeff States, chief investment officer at the pension fund.

"The biggest reason for this is we still have not totally funded our commitments from our last value-added search from summer 2006. Around 60% of the capital that we committed has not been called by the real estate managers and we want to get this capital commitment before we start anything new," said States.

The pension fund made three $25m commitments in August 2006 to Hines US Office Value Added Fund II, AEW Value Investors II and Allegis Value Trust.

The situation with Sacramento County is reflective of what many real estate managers are facing in the market as it's very hard to find and close real estate acquisitions, while financing is hard to locate, and there is a large gap between what buyers and sellers think a property should be trading at.

The end result is the transaction volume for deals this year is already down 80% on the previous year.

"We are in no hurry to place this additional capital.  The longer we wait might create additional investment opportunities," added States.