REAL ESTATE – The 50 largest public pension funds in the US made almost $20bn (€15.8bn) in new real estate commitments last year – double the 2004 figure – according to industry research.
The total real estate holdings of the country’s largest schemes rose by 19.4%, or $15.5bn, to $95.1bn, newsletter Real Estate Alert said, citing its own annual survey. That was after a 1.9% increase in 2004.
The asset class accounted for 5.3% of the funds’ total assets – up from 4.6% at the end of the previous year. The figures exclude real estate investment trust shares as well as timber and agriculture.
The biggest net rise in real estate investments in 2005 was seen at the California State Teachers fund, the report said. The fund’s commitment had raised $2.8bn to $8.3bn. The New York State Teachers scheme was up $2.7bn to $4.9bn. Other large movers were the Massachusetts Pension Reserve and Michigan Retirement.
CalPERS, the California State Employees’ Retirement System, was a net seller of real estate in the year. Its portfolio declined by $436m to $10.7bn. The report said that while the fund sold off at least $6.8bn of properties, that was offset by new investments. And it added that the fund has $7.8bn of unfunded commitments.
The top consultants for the asset class were the Townsend Group, Callan Associates, Pension Consulting Alliance and Russell Real Estate Advisors.
