CalPERS hires Invesco for multifamily mandate

The $260 billion pension plan has selected the firm as a new manager for its multifamily real estate program. Meanwhile, another public institution has terminated its relationship with Invesco as one of its core real estate managers.

The California Public Employees’ Retirement System (CalPERS) has formed a new partnership with Dallas-based Invesco Real Estate. The partnership, which will be called Institutional Core Multifamily Investors, will invest in multifamily properties, particularly in the western US.

CalPERS initially will commit $250 million to the multi-year partnership, which will seek to build a portfolio of stable, income-generating core apartment properties focusing on target markets in the west and Midwestern US.

“Invesco Real Estate’s extensive experience and proven track record in multifamily investing make them a great fit for this program,” said Joe Dear, CalPERS’ chief investment officer, in a statement. “We’re excited to work with them as we identify and acquire multifamily assets with both strong returns and the potential for future appreciation.”

Invesco is the latest manager to be added to CalPERS’ multifamily program, which currently holds approximately $2 billion in assets. The pension plan’s holdings in the property type accounted for approximately 14.9 percent of its total real estate portfolio as of September 30.

Meanwhile, however, Ohio Police & Fire Pension Fund has dropped Invesco as one of its core real estate fund managers, filing a redemption request for its remaining $88 million in Invesco Core Real Estate USA, a fund in which it has invested since 2007. The pension said it was exiting the fund as part of a portfolio rebalancing. Invesco, however, also is said to be the poorest-performing of the pension system’s eight core open-ended real estate managers, generating an internal rate of return of -3.1 percent since inception, as of the end of 2012. Invesco could not immediately be reached for comment.