Zoe Hughes
The $72.3bn US pension joins a raft of North American funds recording losses for the year to June 30. Once again real estate was the best performing asset class returning 8.74%, followed by fixed income and private equity.
A report by PCA to the $234bn California pension fund has highlighted China and India as the most attractive emerging markets in which to invest. The pension will next week consider backing calls to allocate significantly more capital to emerging markets over the next decade.
The $127bn pension fund saw its real estate investments return just 8.7% in the year to June 30, 2008 – against a benchmark of more than 10%. Despite its underperformance, real estate remained the strongest asset class for the pension during turbulent market conditions.
The fund of funds is actively focusing on real estate in Asia as it plans to boost its investments in unlisted real estate funds generally. The firm will also raise new Asia property funds. According to new Asia Pacific head, Martin Lamb, the next 10 years will be the “decade of investing in Asia."
The real estate arm of the US pension fund and asset manager is targeting commercial real estate opportunities in the UK and Europe with its first international office. Former Invesco retail executive Paul Wilson will lead the effort.
Emerging markets accounted for a quarter of all property sales during the first half of 2008, compared to just 10 percent a year ago. More than 9,000 properties valued at $306bn were sold in the first six months of this year.
The Los Angeles-based private equity real estate firm spent one month raising capital for its distressed credit fund, raising a total of $900m from existing investors. The fund is expected to invest in distressed property debt and operating companies with strong real estate components.
The Teachers’ Retirement System is reviewing its real estate allocations for the next five years as part of an annual review of commitments. The pension fund will also focus more effort on emerging managers.
The New York-based private equity real estate firm is in the final stages of closing its third European real estate fund, Blackstone Real Estate Partners Europe III. The firm is also raising a distressed real estate fund led by former Merrill Lynch Americas real estate head, Mike Nash.
The Pension Benefit Guaranty Corporation is seeking up to three private equity and real estate advisors to manage its new $5.5bn alternatives ‘pot’. The pension fund, which represents 44 million US citizens, is branching out into alternatives in a bid to reduce its $14bn deficit.