REAL ESTATE - Santa Barbara County Employees’ Retirement System has approved a new real estate investment policy.
It happened at the fund’s board meeting on March 28. The pension fund was assisted in this investment activity by its consultant, Pension Consulting Alliance.
The pension fund has now established a set allocation for real estate. Its Retirement Administrator Oscar Peters said, "We have now set a 5% allocation for real estate and hope to get this invested over the next couple of years."
Santa Barbara County is a relatively new player to real estate. It has already made a core commingled fund investment. This was a $40m (€29.9m) in the RREEF America REIT II. This commingled fund mainly invests in established and leased office, industrial, retail and apartments in the US.
The pension fund now has another $60m to $75m that could be invested in real estate over the next couple of years. The investor will have the capability of only investing in commingled funds. Its real estate allocation is not large enough to consider a separate account or JV.
Santa Barbara County figures it will be looking at placing the capital into a combination of core and value-added commingled funds. The core funds would be looking at investing in the four main property types.
Value-added commingled funds could take a variety of approaches. It could be investing in existing assets that need a renovation, repositioning or releasing. It also might be investing equity in new development projects. Both main or specialty property types could be considered.
Santa Barbara County will not make the decision on its own as to which commingled fund it will place capital into. This will be done with assistance from its consultant. Pension Consulting Alliance will suggest to the pension fund a list of potential candidates.
The pension fund now has total assets of $1.8bn. The actual amount invested in real estate is 2%. The accepted range for the real estate allocation is from 3% to 6%.