LA County pension fund to put $600M in CBRE real estate fund

A Los Angeles County employee pension fund has agreed to invest up to $600 million in a real estate fund managed by CBRE. 

The board of the Los Angeles County Employees Retirement Association approved the investment into CBRE U.S. Core Partners Fund, according to meeting documents filed last week. 

The CBRE fund, which had raised $6.4 billion as of February according to SEC filings, is focused on logistics and residential investments in the U.S., LACERA said. The fund is managed by CBRE’s investment arm. 

CBRE defines “core” as largely focused on “Class A properties that are in prime areas and are occupied by creditworthy tenants on long-term leases,” according to CBRE research. 

According to the National Council of Real Estate Investment Fiduciaries, core real estate funds are on average 28 percent allocated to logistics and residential properties, 26 percent allocated to offices and 12 percent to retail. The rest is allocated to self-storage and other properties. 

Private real estate made up about 6.2 percent of LACERA’s total fund at the end of 2022, worth about $4.3 billion, according to the pension fund’s annual report. LACERA reported a year-over-year return on core private real estate of 24 percent. 

In February, LACERA’s board approved a commitment for up to $600 million in a Clarion Partners’ fund, about 65 percent allocated to industrial and multifamily. Office investments make up 18 percent of that fund.