Los Angeles County Employees' Retirement Association, Pasadena, Calif., committed $200 million each to Heitman, Clarion Partners and Stockbridge Capital Group for real estate separate accounts, said John McClelland, principal investment officer-real estate at the $41.7 billion pension fund, in an e-mail.
The selections follow an RFP launched in January. Pension fund officials launched the search to further diversify the pension fund's real estate program because three of its six separate account managers run close to a total of $1 billion.
Pension fund officials also committed $100 million to Sterling Investment Partners III, a middle-market private equity fund.
Separately, the pension fund revised its real estate objectives, policies and procedures to increase the amount of capital that a single emerging manager may run to 10% of the real estate portfolio from $300 million. Under the current size of the real estate allocation, this change in policy results in an increase to $417 million per emerging manager, according to a memorandum for the May 8 board meeting.
The pension fund also changed its real estate benchmark to the NCREIF Open End Diversified Core Equity index from the NCREIF Property index. Since December, pension fund officials have added leverage to the core real estate portfolio to 30% from 12%, which brings it more in line with the leverage in the ODCE which is 22%, the memo stated. Real estate consultant Townsend Group assisted.
