REAL ESTATE - San Bernardino County Employees Retirement Association will be looking to invest more capital into commingled real estate funds that pursue an international real estate strategy.

Don Pierce, who is the investment officer for the pension fund, said: "We think that international funds can gives us an additional layer of diversification within our real estate portfolio. Some of the funds have a more focused investment strategy than commingled funds in the US. Another factor for us is that the cap rates on the international investments are higher than what can be achieved in our country."

San Bernardino County figures that it will be making commitments to a few international commingled funds this year. Pierce said, "We have the capacity to invest $40m(€31m) to $60m in this strategy in 2007." The pension fund would like to have the commingled funds investing in assets in markets like Europe and Asia.

San Bernardino County is no stranger to international investing. One of the commingled funds that it has invested in previously was the AMB Japan Fund managed by AMB Property Corp.

The pension fund will not be alone in making the final decisions on which international funds that it invests in. San Bernardino County will be assisted by its real estate consultant, The Townsend Group.

The amount of capital it will be investing in the commingled funds will be less than what the pension fund has invested on an annual basis in the past. In previous years, San Bernardino County has placed $120m to $160m in commingled funds.

The pension fund now has less capital available. It has a targeted real estate allocation of 8%, but has actually invested 10.5% of total assets in the asset class. This is still within the pension fund’s accepted range for real estate, which is up to 13%. San Bernardino County has total assets of $5.7bn.