CalPERS Takes Huge Hit to RE Portfolio

CalPERS has taken a huge hit to its real estate portfolio according to The Registry.

At the end of March, the pension fund placed a net-asset fair-market value on its real estate holdings of $17.6 billion. Three months later, the retirement system said the value had fallen by nearly a quarter to $13.4 billion.

Amongst those losses are:

…CalEast Global Logistics holdings (run by LaSalle Investment Management). The portfolio began the quarter with a value of $3.8 billion. By the end of June, it had fallen 60 percent to $1.52 billion.

and…

A portfolio previously managed by San Francisco-based MacFarlane Partners lost more than half its value, dropping from $854 million at the start of the quarter to $395 million by midyear. California Urban Investment Partners LLC was managed separately by MacFarlane and was conceived as a vehicle to buy and own central-city retail projects in underserved neighborhoods. The account is now managed by Stockbridge Capital Partners.

There was a widely reported story on this last month. We’ve heard rumors that CalSTRS has also made investments with MacFarlane, which begs the question of whether MacFarlance will “quit” that account too.

Other investment managers who have placed money for CalPERS and have lost significant amounts of money include: Hines, Miller Capital Advisory, and Blackrock.

What I find most fascinating is that several of these names mentioned are now raising distressed debt funds. Perhaps CalPERS can invest in those and buy back their own assets.

[via The Registry]

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