The $306.5 billion California Public Employees' Retirement System (CalPERS), the largest public pension system in the US, has made a $250 million investment commitment to JPMorgan Asset Management's pan-Asia vehicle.
According to the minutes of an investment committee meeting posted on its website, CalPERS has backed the Asia-Pacific Property Fund, the real estate fund launched by JPMorgan Asset Management for investments in core assets across Asia earlier this year. The target fund size of the vehicle was not disclosed.
JPMorgan Asset Management did not respond to email queries as of press time. However according to the Australian Financial Review, CalPERS is seeking to invest in Australian property. JP Morgan Asset Management has reportedly received a mandate from the pension giant to acquire St Collins Lane, a refurbished shopping mall in Melbourne.
CalPERS has been among the rising number of global institutional investors recording lower investment returns in their latest annual reports. As per the preliminary fiscal year 2016 results released late July the pension system saw real estate generate a net return of 7.1 percent for the fiscal year ending June 30. The return was 5.6 percent under its real estate benchmark, the NCREIF-ODCE index. Realized losses on the disposition of legacy assets in the opportunistic program was cited as one of the reasons for the underperformance in an official statement.
As of end June, 2016 the public pension fund had 9.3 percent of its portfolio allocated to real estate amounting to $27.3 billion in total. The allocation remains under the interim strategic allocation target of 10 percent for the asset class.