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Investors - APRIL 15, 2014

SBCERA approves potential $50m commitment, consolidates consultants

by Reg Clodfelter

The investment committee for the $7.6 billion San Bernardino County (Calif.) Employees’ Retirement Association approved a recommendation for a $50 million initial investment in Invesco Real Estate Asia Fund and made a move to potentially consolidate its consulting team.

The approval of the investment recommendation, which was confirmed by Don Pierce, chief investment officer with SBCERA, is subject to a decision by SBCERA’s Board of Retirement, which should be made at a May 1 meeting.

The investment committee also approved a motion to terminate its contract with The Townsend Group for real estate consulting and subsequently expand the scope of its general consultant, NEPC, to include real estate investment consulting. This decision is also subject to approval from the Board of Retirement.

The evaluation factors for the decision were outlined at the investment committee’s Dec. 17, 2013, meeting and include understanding clients' goals and objectives, advice on asset allocation, communication of proactive advice and innovative ideas, capability of consultant assigned to the pension fund, credibility with the investment committee and communication of philosophy.

The Invesco Real Estate Asia Fund, managed by Invesco Real Estate, is an open-end core fund that will invest in Asia with a specific focus on Australia, China, Hong Kong, Japan, Singapore and South Korea. The fund will target office, retail, industrial and multifamily properties with an expected average deal size between $80 million and $150 million. To date, the fund has received approximately $400 million in commitments from six founding investors and expects an initial close in June 2014. Gross returns for the fund are expected to be in the 9 percent to 11 percent range. 

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