NORTH AMERICA – Los Angeles Fire and Police Pensions is planning on making $85m (€64m) of new real estate commitments into two open-ended commingled funds.
The larger of the two commitments is to allocate $60m into the PRISA fund, an $11m core fund managed by Pramerica Real Estate Investors.
The fund's objective is to outperform the ODCE index and has a target gross return over a complete market cycle of 7.5-9.5%.
The fund is allowed to use 30% leverage on its portfolio.
The investment follows the pension fund's decision last May to change its real estate portfolio makeup from a 50/50 split of core and non-core to 60% core and 40% non-core.
LA Fire and Police will also invest $25m into the PRISA III fund.
One part of this is to move the pension fund's existing $15m investment in PRISA II into PRISA III.
The other part is to make a new $10m commitment into PRISA III.
Part of the attraction of moving capital into PRISA III is that the commingled fund has not been open to new investors since 2007.
The fund has approximately $1.1bn in assets, with a targeted long-term gross return of 11-14%.
In other news, the Los Angeles City Employees' Retirement System has approved an investment of up to $25m into the $650m Mesa West Real Estate Income Fund III.
The fund will originate and service a portfolio of value-added real estate properties diversified by geography and property type in the US.
A final closing for Fund III is projected for some time during the first quarter.