NORTH AMERICA – Connecticut Retirement Plans and Trust Funds has hired three core open-ended managers – the JP Morgan Chase Strategic Property fund, the Prudential Property Investment Separate Account and the UBS Trumbull Property fund.
The pension fund is planning to allocate as much as $250m (€190m) for the search.
The next step in the process is contract negotiations with the three managers, although no timetable has been established as to when talks will be concluded.
Connecticut will determine how much capital will be allocated to each firm at a later date.
The Strategic Property Fund invests in multifamily, industrial, urban office and retail properties in major US metropolitan areas, while PRISA invests in all core markets, including office, retail and industrial, as well as multi-family and self-storage.
UBS has a suite of funds comprising a core investment fund, a fixed income fund and a core-plus value-add fund.
Connecticut has a 'pacing plan' in mind, with the majority of the growth targeting a core strategy.
The pension fund expects the core portfolio to grow from $507m in March to $910m by the end of 2014.
The value-add portion of the portfolio will increase from $304m to $332m and opportunistic from $515m to $590m over the same period.
Connecticut has a real estate portfolio valued at $1.6bn, as of the end of March.
There remains another $211m of capital to invest before the pension fund reaches its 7% target allocation.
In other news, the San Francisco City and County Employees' Retirement System has approved a $25m follow-on investment into the Fidelity Real Estate Opportunistic Income fund.
It made the same sized investment into the open-ended limited partnership in March 2008.
This investment has returned nearly 10.7% on an annualised basis, net of fees, since inception.
The fund has total assets valued at $337m through June.
The targeted return for investors is a 10-14% yield over a 3-5 year holding period.
The fund invests in high-yield securities backed by commercial real estate in the US, including CMBS, mezzanine debt, B-Notes, real estate-related company bonds and REITs.