Investors

The US’ second largest public pension fund says it could cut the number of fund managers it works with as market conditions prompt it to review investment relationships. The pension says it will focus on those who ‘outperform in difficult markets.’

The US’ second largest pension fund has allocated $1bn to the growing asset class with California’s infrastructure needs to be given preference.

Millennium Group, a Hong Kong-based real estate investment firm, has partnered with Cambodia’s biggest mobile phone operator to build resorts, casinos and an airport on an island off the coast.

Allocations to the private equity and real estate asset classes are expected to rise by more than 20 percent over the next two years, a study by JP Morgan Asset Management has shown, as institutional investors reveal such strategies are no longer ‘alternative’ at all.

The quoted Swiss alternative asset manager saw its private markets business, including real estate and private equity, grow by $3.4bn over the past year. However foreign exchange and hedge fund outflows hit the overall increase in assets under management in its pre-close statement.

Retail investors were given a gloomy picture of the state of the market, after a report by UK property services firm, Colliers CRE, suggested that not only could real rents fall up to 20 percent over the next three years, but that capital values could also fall another 10 percent.

As the world’s largest sovereign wealth funds benefit from rising energy prices and growing economies, many are expected to increase their allocation to the real estate asset class. A report from German real estate investment firm Degi predicts allocations will rise to 15 percent over the next few years, from an average of four to 11 percent.

INREV is overhauling its definitions of core, value-added and opportunity funds after finding that measuring internal rates of return as well as leverage is not the best way to classify them.

The state’s legislature has increased the Florida State Board of Administration’s allowable allocation to private equity and venture capital from 5 percent to 10 percent. The pension fund is also launching an infrastructure platform.

Limited partners are starting to reduce the number of relationships with fund managers. And as investors start shedding the pounds, private equity real estate secondaries are getting ready to pick up the slack. By Zoe Hughes