CalPERS Increases China Exposure With Real Estate Partnership

The California Public Employees’ Retirement System (CalPERS) has almost doubled its investment in a Chinese office and retail mall strategy. The US pension fund has added $300million to the ARA China Long Term Hold entity, according to a board meeting document.

CalPERS has placed a value on its investment in the ARA Asset Management Partnership at $327million through the first quarter of this year, as stated in a pension fund document. Year to date, the portfolio has returned 5.5% for California investor. CalPERS increased its investment in China Investment Partners – ARA’s single-investor fund – to $830m in 2013, having committed an initial $500m.

CalPERS has also invested in ARA’s pan-Asian real estate funds, ARA Asia Dragon Fund I and ARA Asia Dragon Fund II. The latest fund invests in high-quality office buildings in central business districts, as well as retail malls in well-located, densely populated suburbs. The manager typically invests in first and second-tier cities in China.

CalPERS has also made a $310m allocation to the Land Management Company, managed by IHP Capital Partners. In a board-meeting document, the pension fund said the value on Land Management Company was at $590m, at the end of the first quarter of this year. The net rate of return on the portfolio was 16.25%.




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