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.
