Investors - MARCH 18, 2013

CalPERS invests $250 million in industrial partnership

by Andrea Waitrovich

The $255 billion California Public Employees’ Retirement System (CalPERS) has committed $250 million into the Institutional Logistics Partners partnership, a U.S. industrial core property partnership with real estate manager Bentall Kennedy

CalPERS has an 8.4 percent actual allocation to real estate with a 10 percent target goal. The pension fund seeks to invest 75 percent of its real estate portfolio in stable incoming-producing properties as part of its restructuring real estate strategic plan. Previously, the fund had substantial high-return property investments, many of which underperformed during the past few years.

Its portfolio includes a one-third stake in Bentall Kennedy, which CalPERS bought in June 2012 for $100 million. Other recent core investment activities include the $480 million purchase of Russell Investments' headquarters in Seattle from insurer Northwestern Mutual Life Insurance Co. in April 2012 and the acquisition of Hamilton Square in Washington, D.C., from San Francisco–based real estate investment firm Shorenstein for $200 million in June 2012.

CalPERS reported a 12.79 percent return for its real estate portfolio during its 2012 fiscal year.

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