As part of a plan to cut the number of external managers and realign its real estate portfolio, CalPERS is selling $3 billion of its investments in 43 real estate funds on the secondary market to Blackstone Group, the $296.7 billion pension fund announced Thursday in a news release.
“This sale allows CalPERS to focus on our strategic plan and on investing in assets and managers that better align with our real estate goals,” said Paul Mouchakkaa, managing investment director for real assets, in the news release. “It also represents the continued effort to reduce complexity across the CalPERS fund.”
CalPERS spokesman Joe DeAnda said in an e-mail that the assets being sold were part of CalPERS’ legacy real estate portfolio.
The California Public Employees’ Retirement System, Sacramento, has been embarking on a major restructuring of its $27.1 billion real estate program since the financial crisis when the pension fund’s focus on opportunistic real estate opportunities caused billions of dollars in losses.
Mr. DeAnda said the current focus is on investments in income-producing real estate.
Back in June, CalPERS officials announced they planned by 2020 to reduce the number of external managers in general to 100 from about 200. The sale of the real estate funds marks the first major move in that direction.
In June, the pension fund hired Park Hill Group to advise on the sale of the $3 billion in real estate assets.
Peter Rose, a spokesman for Blackstone, confirmed the transaction and said Strategic Partners Fund Solutions, Blackstone’s secondary and private market platform, has more than $19 billion private equity and real estate secondary investments.