Orange County Pension Seeks Manager For $150 Million Real Estate Commitment

The Orange County Employees Retirement System (OCERS) is looking for a manager to handle a new, $150m non-core real estate investment. From I&P Real Estate:

Orange County Employees Retirement System is conducting a new manager search for $150m (€117.7m) of non-core investment.

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Orange County and RVK will conduct due diligence on investing some capital in the AG Core Plus IV fund.

An investment recommendation is expected next month, along with a presentation to the pension fund’s investment committee.

Orange County made a $40m commitment to AG Core Plus III in 2011, and the fund has generated a gross IRR of 18.94% since inception.

The $22.7m of capital called and invested is currently valued at $29.5m, as of the end of June.

For Fund IV, Angelo Gordon & Co is targeting 14-15% gross returns, with most investments to be in the US, alongside selective transactions in Europe.

Orange County and RVK will also consider other diversified funds targeting a similar risk/return profile to that of AG Core Plus IV.

The manager needs to have at least $500m in combined US and international real estate assets under management.

Orange County does not want more than 20% ownership of the total fund.

Each manager must have at least five years of performance history managing commercial real estate.

Orange County is looking for a focus on core-plus and value-added assets, with the opportunity to increase value through leasing, redevelopment, repositioning and other activities.

Preferred property types include apartments, hotel, industrial, office, retail and self-storage assets.

The move is part of a plan by OCERS to significantly increase non-core real estate investments. Currently, non-core makes up 23.7 percent of the fund’s real estate assets.

OCERS is shooting to increase that number to 30 percent by the end of 2016.