NEWS

OCERS set $400m real estate pacing plan for 2025

By Muskan Arora

The Orange County Employees Retirement System has set a real estate pacing plan of up to $400m for 2025, as discussed at its latest meeting.

The system is looking towards new commitments of up to $100m to core or core-plus funds, and investment between $225m and $300m to non-core real estate funds during this year.

The core real estate strategy consists of accessing existing open-ended positions to rebalance the portfolio. This assessment will be focused on optimizing fee structures, hiking exposure to high performing managers and aligning allocations with desired property types to enhance the overall portfolio performance.


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Further, the pension plan is also considering slashing its $243m investments in the Principal US Property Account to align with other core allocations.

The second largest core open-ended investment of the pension plan is $190m in Morgan Stanley Prime Property Fund.

The non-core investment strategy will focus on investments that work by complementing existing portfolio, thematic investments with specialist managers.

This strategy will target sectors including data centers, industrial outdoor storage, build-to-rent, cold storage, manufactured housing and real estate credit.

OCERS returned 10%, 4.1% and 8% for its 1-, 3-, and 5- year time period, over performing its benchmark of 9.8*, 3.9% and 7.7% respectively as of December 31. 2024.