REAL ESTATE - The Sacramento County Employees Retirement System has chosen three real estate fund managers for its value-added commingled fund manager search.

The pension fund has selected Hines US Office Value Added Fund II, AEW Value Investors II, L.P. and Allegis Value Trust. The investment into each fund is $25m.

The scheme took this action at its board meeting on August 16. There was one other commingled fund that the pension had considered for its value-added search: the GEAM Value Add Realty Partners, L.P.

The scheme had chosen the Hines fund as a way to beef up its office portfolio. Its Chief Investment Officer Jeff States said, “This fund only invests in office buildings. We are under allocated for office buildings. At the end of March we had only 21.6% of our real estate portfolio in office buildings. NCREIF has office at 38%. This will give us more exposure the property type in a value-added way.”

Sacramento County did take one other real estate related action at its August board meeting, approving the transfer of its investment in The Tower Fund from MetLife to BlackRock Realty. The new name of the commingled fund is Granite Property Fund, Inc. This means the structure of the fund is being changed from a separate account of a life company to a private REIT.

States said: “We don’t think this action really changes anything as far as our investment is considered. The commingled fund will still have Jay Alexander as its portfolio manager. We have been pleased with the performance of this investment.”

Sacramento count made a $50 million commitment to the Tower Fund in 2005. The current value of this investment is a little more than $58 million.