CalPERS terminated BlackRock as manager of its $1 billion apartment complex real estate portfolio.
The $210.7 billion California Public Employees' Retirement System, Sacramento, consolidated the apartment portfolio with GID Investment Advisers.
CalPERS was forced to write off a $500 million investment with BlackRock in New York City's Stuyvesant Town-Peter Cooper Village through a partnership with Tishman Speyer Properties. The pension fund suffered a 37% loss in its real estate holding in the fiscal year that ended June 30, a dollar loss equivalent to 1.3% of the plan's entire market value at the time.
“By consolidating our core multifamily portfolio under a single partner/manager, we anticipate lower costs, improved efficiency and enhanced performance,” said Ted Eliopoulos, who heads CalPERS' real estate investment division
BlackRock Realty Advisors had managed the apartment complex portfolio since 1998. BlackRock's real estate unit teamed up with Tishman Speyer to buy the Manhattan developments for $5.4 billion in 2006. CalPERS said last November it was reviewing its ties with the New York company following the loss.
“As a matter of policy, we do not comment on client activity,” Lauren Trengrove, a spokeswoman for BlackRock, in an e-mail.
GID will manage investments in 57 apartment projects with 14,674 units in 13 states with a net asset value of about $1.1 billion, CalPERS said. GID already manages Windsor Realty Fund III for the pension fund.