NORTH AMERICA – The Los Angeles Fire and Police Pensions has approved a new REIT manager search that could influence which managers are involved in the REIT portfolio, valued at $265m (€203m) as of the end of 2012.
This portfolio is currently split between Morgan Stanley Investment Management, which manages $91.6m, and Principal Real Estate Investors, which manages $173.4m.
The existing contracts were set to run out at the end of May.
They were recently expanded for one year to let the search runs its course.
William Raggio, interim general manager for the pension fund, wrote in a board meeting document that each manager had underperformed the median of the peer group over multiple time periods.
The Townsend Group, a consultancy, recommended that a REIT manager search be conducted and that the existing REIT manager contracts be extended, according to a pension fund document.
Los Angeles Fire and Police said it had not yet determined the timing of the search from start to finish.
In other news, the Employees' Retirement System of Rhode Island has made a $50m commitment into the Heitman America Real Estate Trust.
Rhode Island Employees said it was looking to expand the core portion of its real estate portfolio.
Its other core open-ended fund managers include AEW Capital Management, JP Morgan Asset Management, Morgan Stanley Investment Management and Pramerica Real Estate Investors.
The pension fund still has room to invest more capital into real estate in future.
Through the end of February, it had invested 3.5% of its $7.6bn of total plan assets in the asset class.
The targeted allocation is 8%, which the pension fund aims to achieve within the next couple of years.