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CalPERS shifts real estate investments

December 1, 2010 |  5:24 pm

The California Public Employees' Retirement System -- as part of a continuing reorganization of its real estate investments -- announced Wednesday that it is switching managers for $1.96 billion of its industrial property holdings.

CalPERS, the nation's largest government pension fund, replaced LaSalle Investment Management of Chicago with GI Partners of Menlo Park and RREEF Investment of Germany.

GI Partners will run $1.9 billion in U.S. assets, known as the CalEast portfolio, and RREEF will manage $60 million in European properties.

"We have confidence in GI Partners and expect excellent performance from the CalEast portfolio going forward, given their strong returns since they joined our real estate program in 2001," said Ted Eliopoulous, CalPERS' senior real estate investment officer.

The $216-billion CalPERS has suffered steep losses in its real estate holdings during the last two years. The fund was forced to write down a nearly $1-billion investment in undeveloped residential property near Valencia, $500 million in an apartment building partnership in New York's Stuyvesant Town-Peter Cooper Village and $100 million in a condominium conversion project in East Palo Alto.

-- Marc Lifsher