Largest public pension fund buys $100M stake in Bentall Kennedy

Calpers calls investment in national real estate firm, a 'new strategic move'

TRD New York /
Jun.June 27, 2012 12:30 PM

One month following Calstrs’ purchase of a 90 percent stake of LCOR for $820 million, the nation’s largest public pension fund has nabbed one-third of Bentall Kennedy, a national real estate and development firm, for roughly $100 million, CoStar Group reported. The group is the California Public Employees’ Retirement System, also known as Calpers, which calls the acquisition a “new strategic move.”

Unnamed sources told CoStar that this new trend of taking part ownership of real estate firms shows a bid to gain an advantage against competitors for assets that carry lower risks and provide steady returns. In addition, the sources said, this is a way for investors to benefit from potentially higher returns from future development of real estate assets.

Calpers has invested over $18 billion in global real estate, CoStar said, which equates to 8 percent of the fund’s $228 billion investment portfolio.

The Bentall Kennedy purchase represents a reversal for Calpers, which had been shifting its strategy away from real estate investment after taking hits on boom-era housing deals, including losing a $500 million stake in Stuyvesant Town and Peter Cooper Village. [CoStar]

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