Alameda County Pension Fund Invests $30 Million In Real Estate

Alameda County Pension Fund real estate investment

By Jon Peterson

The Alameda County Employees’ Retirement Association has approved $30 million in new investment for two real estate funds: $20 million for the Jamestown Premiere Property Fund L.P. and $10 million for the Lion Industrial Trust.

Alameda County Pension Fund real estate investmentThe Premiere Property Fund is a relatively new core open-ended commingled fund being managed by Atlanta-based Jamestown Properties. It buys a mixture of core office, industrial, retail and apartments on a nationwide basis.

The Lion Industrial Trust is a property-specific commingled fund managed by New York City-based Clarion Partners. The fund invests nationwide, buying existing properties and investing in new development. Last year, the California State Teachers’ Retirement System approved $125 million in investment in the fund. The manager projects returns for new commitments ranging from 8 percent to 10 percent on an annualized basis.

“ACERA made these investment decisions to increase the overall diversification in the portfolio as it had redeemed out of RREEF America REIT II and the BlackRock Granite Property Fund earlier this year,” said Phil Wogsberg, an investment officer with the pension fund.

ACERA decided to exit RREEF America II at its Feb. 16board meeting. The pension fund invested $30 million in the commingled fund, committing in July 2006. In February, the pension fund valued its investment at $20.5 million as of Sept. 30, 2011.

ACERA voted in January to leave the Granite Property Fund. The pension fund invested $50 million in the commingled fund, committing in 2007. It valued the investment at $28.6 million through the end of September 2011.

RREEF America II and Granite Property Fund are both core open-ended funds.

Jamestown has a history of investing capital on behalf of individual investors from Germany. Besides its Atlanta headquarters, it maintains a second headquarters in Cologne, Germany. The Premiere Property Fund is the company’s first effort to attract capital from U.S. -based institutional investors. The manager projects annualized returns of 9 percent to 12 percent for investors.

Jamestown has a regional office in San Francisco at 22 4th St. The company owns the not-quite 600,000-square-foot Alameda South Shore Center in Alameda.

Rather than seek proposals directly from the real estate management community, the pension fund relied on its real estate consultant, The Townsend Group, to recommend funds, Wogsberg said. Townsend is based in Cleveland. Consultant Jennifer Young is working on the ACERA account from the firm’s regional office in San Francisco.

ACERA may or may not invest additional capital into real estate for the rest of 2012. Through the end of March 2012, its real estate portfolio was valued at $331.75 million. It had total plan assets of $5.5 billion, which puts the real estate portfolio right at its 6 percent targeted allocation for the asset class.

ACERA had a total of 20,475 members in its retirement system through the end of 2011. The total amount paid out in benefits to these members last year was $300 million.

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