UNITED STATES - San Francisco Employees' Retirement System has selected European Investors and ING Clarion Real Estate Securities as its global Reit managers.

The pension fund is now in contract negotiations with these two firms, and hopes to have these finalised shortly, but San Francisco Employees' selected the two firms at its board meeting on February 12 - assisted by its real estate consultant The Townsend Group -following a parade including CB Richard Ellis, Citigroup and Morgan Stanley.

 "We think that now is a really good time to be investing some capital into a global REIT strategy.  There are many public REITs around the world that are trading at below their net asset value.  This wasn't the case for many companies 12 months ago," said Matt Johnson, principal at Townsend and the person working on the San Francisco Employees' account.

Townsend was involved in a full RFP search for global REITs, to which 17 managers responded, and $150m (€102.1m) will now be split evenly between the two winning firms, to yield a 10-12% annualized return.

Both companies will have both separate account relationships with San Francisco Employees'.

Through the end of 2007, European Investors manages a REIT portfolio valued at $6.4bn and a third of this portfolio or $2bn has been invested in global REITs.

ING Clarion, meanwhile, manages $15.1bn in global REITs product.