UNITED STATES - A significant amount of pension fund capital in the United States is still moving towards Europe as California State Teachers Retirement System and Los Angeles County Employees Retirement Association made new investments.

Both investors are mainly looking to invest with managers that have a proven track record in Europe and have people located in the local markets.

John McClelland, principal investment officer for real estate for LACERA, said his fund has invested a further $25m with the Carlyle Group, which is looking to raise €1.5bn and generate gross IRR of 20% for investors through its opportunity fund.

"We invested in Carlyle Real Estate Partners III because we were impressed with the experienced staff they have in Europe and being able to find and negotiate transactions.  They have an excellent performance and track record.  This should lead to us achieving more diversification for our real estate portfolio," added McClelland.

CalSTRS has also made two investments in European real estate, having now tripled its earlier $100m commitment to the JER Europe Fund III and added a $150m commitment to the Redwood Grove fund.

Grove International is building a $2bn investment fund being formed so the firm can take control positions in global real estate private equity and real estate-related investments.