San Bernardino County Employees’ Retirement Association is expected to direct $140m (€134m) of new capital to real estate next year.
The pension fund’s real estate pacing plan for 2017, which will be voted on at a board meeting on 5 January 2017, could see $80m allocated to core investments.
San Bernardino County, which is being advised by consultants NEPC, is seeking to ensure at least 50% of its real estate portfolio is made up of core investments and so is likely to look at multiple funds.
Chief investment officer Donald Pierce said: “I would be very surprised if we don’t place capital into more than one core commingled fund.”
The pension fund has been selling down a separate account managed by American Realty Advisors, the proceeds of which could go to new core fund investments.
It is expecting to receive approximately $75m in distributions when one of the three remaining assets in the $193m portfolio is sold in 2017.
“When you only have three assets in a separate account, it makes a lot more sense from a diversification standpoint to invest capital into a core commingled fund,” said Pierce.
The pacing plan means $60m could be invested in non-core real estate in 2017, either through funds or co-investments.
As part of the plan, NEPC has recommended making $25m commitments to Partners Group, Apollo Global Management and Invesco Real Estate, including co-investments alongside the Invesco Asia Core Fund.