Orange County plans to add timber, global real estate managers
SANTA ANA, Calif. — Orange County Employees Retirement System is searching for one or two managers to run a $145.6 million timber portfolio, said Keith Bozarth, chief executive officer of the $7.28 billion system.
Funding would come from reducing the system’s $700 million TIPS portfolio; PIMCO now runs about $560 million in TIPS and Barclays Global Investors, $140 million. Hancock Timber runs the fund’s existing $35 million timber allocation.
Investment consultant Callan Associates is conducting the invitation-only search. The board is expected to make a selection by May.
Separately, the board approved a search for a manager for global real estate securities, representing 10% of its $525 million real estate portfolio, said Mr. Bozarth. The mandate could be in a separately managed account or a commingled fund, he said. Callan will conduct the invitation-only search; a selection is expected by May.
LACERS delays real estate consultant decision
LOS ANGELES — Los Angeles City Employees’ Retirement System’s delayed a decision on hiring Courtland Partners as its new real estate consultant until the March 27 board meeting, said Daniel Gallagher, chief investment officer of the $10.7 billion system. The investment committee recommended Courtland after firm officials promised to open a Los Angeles office, Mr. Gallagher said. Townsend Group, the system’s current real estate consultant, has rebid.
Separately, the fund’s board approved a change in its real estate strategic plan to allow allocations to emerging managers, said Wayne Ige, investment officer. The addendum will give the system broader exposure to new or emerging real estate management firms. The change in policy will not immediately result in manager searches, he said.
The system’s investment committee also recommended committing $30 million each to CB Richard Ellis UK Fund III and Colony Investors VIII; $25 million to CityView LA Urban Land Fund I; and $5 million to Cardinal Americas. The board is expected to vote on the recommendations at its March 27 meeting.
Oregon commits $400 million
Oregon Investment Council, which oversees the $60 billion Oregon Public Employees Retirement Fund, Salem, committed $200 million to Apax Europe VII, and $100 million each to TPG Star and the Fidelity Real Estate Opportunistic Income Fund, said Ley Garnett, spokesman for the council.
Partners Group buys Pension Consulting Alliance real estate unit
Partners Group, a Swiss alternative asset manager, bought the discretionary real estate consulting unit of consulting firm Pension Consulting Alliance, according to Cyrill Wipfli, spokesman for Partners Group.
Partners Group will have the option to acquire the remainder of the real estate consulting business in three to five years, said Nori Gerardo Lietz, PCA co-founder and managing director, who declined to give asset values of each portion of the business.
Ms. Lietz will join Partners Group as managing director and chief strategist for Partners’ private real estate investment management business. Pam Alsterlind, COO of PCA’s real estate practice, and Claude Angeloz, partner and head of Partners Group’s private real estate asset management business, will co-manage the merged real estate operation. In all, 10 PCA investment professionals will be joining Partners Group, Mr. Wipfli said. The business will remain in San Francisco with offices in London, Singapore and possibly Hong Kong, Ms. Lietz said.
Ms. Lietz said the move will formalize a bifurcation between PCA’s real estate business and general consulting business, headed by Allan Emkin, PCA co-founder and managing director. When the transaction is complete, Mr. Emkin will own 100% of the general consulting business; he plans eventually to distribute a portion of the equity interest among colleagues in the general consulting practice over time, she noted.
Marco Consulting searches heavily weighted to hedge fund managers
CHICAGO — Marco Consulting Group said 51 of the 291 manager searches it conducted in 2006 were for hedge fund-of-funds managers, the most for any single category. The latest year’s total for hedge fund-of-funds searches marked a sharp jump from 26 searches in 2005 and 14 in 2004, said CEO Richard Graf.
The firm, a leading investment consultant to union plans, also conducted 21 searches for portable alpha managers in 2006, the first year in which its clients allocated money to that strategy. Clients allocated a combined $641 million to hedge fund of funds managers and $470 million to portable alpha managers last year.
Marco also reported real estate searches fell to 12 in 2006 from 21 in 2005; international/global equity searches fell to 37 searches from 57; and large-cap equities, down to 35 searches from 50.
Most M&A backed by private equity again in 2006
KANSAS CITY, Mo. — Private equity-backed M&A continued to dominate overall merger and acquisitions activity in the U.S. for 2006, with $328 billion in transactions in which public companies are taken private, five times the total in 2005, according to a report released Feb. 20 by Robert W. Baird. Private equity transactions accounted for 31% of all U.S. M&A and five of the 10 largest transactions. Also, the $215.4 billion in private equity funds raised in 2006 will result in increased private equity-backed mergers and acquisitions this year, the report noted.
In Europe this year, Baird predicts that private equity firms will contribute to increased mergers and acquisitions, especially in Germany, where “there is a growing acceptance of private equity transactions.”
Hedge fund database entries up in 2006
NEW YORK — About 13,675 single-manager hedge funds and 6,100 hedge funds of funds were in the industry’s 12 global databases in 2006, compared with 8,100 and 4,150 respectively in 2005, according to PerTrac Financial Solutions’ Hedge Fund Database Study. Single-manager hedge funds managed more than $1.4 trillion as of Dec. 31, while hedge funds of funds managed $700 million, according to a news release from PerTrac, a software provider.
Nearly 4,900 separate hedge fund general partners reported information to databases in 2006, compared with 3,500 the previous year.
About 75% of single-manager funds, or 10,200, reported performance information in 2006. Of those, about 250 manage more than $1 billion in assets while more than one-third manage less than $25 million.
About 4,150 single-manager funds were clones of other funds, either offshore versions or separate share classes, according to PerTrac.
PerTrac ran more than 56,000 investment records through its analytical platform which allows a user to aggregate two or more databases into a single universe, for its database study.
CPI Asia Pacific fund closes at $1.29 billion
NEW YORK — Citigroup Property Investors closed the CPI Capital Partners Asia Pacific fund at $1.29 billion, said Jon M. Diat, spokesman. Investors in the fund include the $90 billion New York State Teachers' Retirement System, Albany. Citigroup and the investment team are committing $200 million to the fund.
