REAL ESTATE - The University of California has decided to activate its real estate investment program for two of its investment entities.
It has $2.5bn (€1.9bn) available to invest in real estate, representing a 5% allocation to the asset class.
This would be done with capital from the $43bn University of California Retirement Plan and the $5.5bn General Endowment Plan.
The person leading the program is Gloria Gil, investment officer/real asset investments. She recently came to the university after several years as the real estate investment officer at the Los Angeles County Employees Retirement Association.
The University of California program had been put on hold in early 2005 when Jon Willis left the university to take a position with AMB Property Corporation.
Gil said: “Our investment strategy will be only with commingled funds right now. We believe this is a better way to invest in the market now.
“Once we have been operating for a while we might look at some other investment vehicles. I am hoping to make some commitments to some commingled funds in the next 60 to 90 days.”
The University of California does have a long way to go to reach its targeted real estate allocation. It has only invested around $120 million in real estate so far. This has been with commitments in Prudential Real Estate Separate Account II (PRISA II) managed by Pramerica Real Estate Investors and AMB Institutional Alliance Fund III run by AMB Property Corporation.
The University of California will be investing in four kinds of real estate. Around have of its portfolio will be in core assets. It will invest 10% or $250m in a REIT investment mandate.
Another 25% of the portfolio will be invested in the value-added bucket. The remaining 15% will be in opportunistic. Around 10% of the entire real estate portfolio can be with international assets.