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U.S. pension fund comes up short on real estate benchmark

by Reg Clodfelter

The $4.7 billion real estate portfolio of the Los Angeles County Employees Retirement Association has come up short of its investment benchmark over the one-year and five-year periods. LACERA’s real estate portfolio underperformed its one-year benchmark, the NCRIEF Open-end Diversified Core Index, by returning 8.9 percent as of June 30, 2014, compared with the ODCE’s 12.18 percent return over that period, according to board documents. The $45.9 billion retirement system’s five-year returns for its real estate portfolio also came up short of its benchmark, the NCREIF Property Index up to June 30, 2013, and the ODCE thereafter, returning 6.7 percent for the five years up to March 31, 2014, 290 basis points below its custom benchmark.

The five-year returns to this period are still suffering from low performance quarters that immediately followed the global financial crisis, particularly second quarter 2009. The return numbers are expected to be much bett

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