The three Orlando city pension funds, whose assets total some $380 million, are concerned about the overlong time it is taking Cabot Partners L.P., Boston, to put together its commingled real estate fund, said Bruce Harter, city treasurer.
He said any delays beyond September could lead the funds to seek to place their allocation elsewhere.
"We have yet to have a capital call," he said. "We have concern regarding their delay" in finding other investors, he said. The Orlando General, Police and Fire pension funds hired Cabot last year, committing some $4 million.
"If we aren't comfortable (with Cabot) beyond September, we could well be back in the real estate (manager) marketplace," he said. He wasn't sure if the funds would do another search for a real estate manager if the Cabot investment isn't consummated; it's possible the funds would allocate the money to one or more of their other real estate managers.
But Mr. Harter recognized a commingled fund is a new vehicle for Cabot, which is well regarded for its separate account real estate investing.
At Cabot, Robert M. Angland, president, acknowledged, "It's been a little slower going than expected" in putting together the Cabot Industries Trust, which hopes to raise $100 million initially. "We're not there yet."
He won't say how much the trust has raised in commitments, but said, "I expect we will be there in the next few months."
"This is really a new area of the market for us," he said of the commingled vehicle. "We can't just draw on our existing client base," which invests through large separate accounts.
He said the trust is seeking $1 million minimum investments, but expects to have a couple of large, possibly $20 million, commitments.
Barry B. Burr