UNITED STATES - Santa Barbara County Employees' Retirement Association is looking at expanding into international real estate for the first time.

RREEF and CB Richard Ellis Investors - its domestic real estate managers - gave a presentation on international real estate to the board of directors last week, according to Tom Ford, retirement administrator on an interim basis for Santa Barbara County, and its detail caught the attention of officials.

"The feeling is that right now our real estate program covers only one-third of the globe as we only invest in the US.  From a diversification standpoint, it would be nice to be invested in the other two-thirds of the world."

It is thought 3% of pension fund's asset could be allocated to international real estate, which would increase its overall targeted allocation to real estate from 7% to 10%.

The matter will be discussed with the pension fund's consultants over the coming months - Pension Consulting Alliance as its general consultant and The Partners Group as its real estate consultant.

Santa Barbara County is considering investing on the international stage through commingled funds and is likely to see the pension fund working with other real estate managers on the international circuit.

That said, officials are concerned about the time it would take to fund international commitments.

"We are a little bit concerned that many new commitments to commingled funds will not actually be funded for 12 to 18 months as some real estate managers are having a hard time finding and closing on transactions," said Ford.

Santa Barbara County is still short of reaching its existing targeted allocation for real estate as the pension fund has now invested just 4.5% of its total plan assets in real estate.

The pension fund has had a difficult time in relation to its investments during the market turmoil as it has total plan assets of $1.9bn (€1.53bn) to the end of June but this is now down to $1.65bn.

Topics