The California Public Employees' Retirement System (CalPERS) has shifted the North American assets of its CalEast Global Logistics LLC, valued at $1.9 billion, to GI Partners. In addition, it has transitioned its European industrial assets, valued at approximately $60 million, to RREEF.
CalEast was previously managed by LaSalle Investment Management.
CalEast owns and operates industrial, logistics and infrastructure-oriented real estate, including warehouses, light assembly, distribution centers, truck terminals, intermodal centers, and air cargo facilities throughout the United States and Canada. CalEast entities include CenterPoint Properties Trust, joint ventures with Aeroterm and North American Truck Terminals, and numerous development joint ventures. In total, CalEast platforms own and operate over 47 million square feet of industrial real estate and logistics infrastructure.
CalPERS took the action as part of its larger real estate restructuring effort to shift assets to managers who outperformed peers managing CalPERS investments during the real estate market downturn.
"We have confidence in GI Partners and expect excellent performance from the CalEast portfolio going forward, given their strong returns since they joined our real estate program in 2001," said Ted Eliopoulos, CalPERS senior investment officer, real estate.
For the period ended March 31, 2010, CalEast Global Logistics posted returns of negative 57% over the previous 1-year period under Lasalle; negative 22.8% over the previous 3-year period; and negative 5.8% over the previous 5-year period.
A fund totaling more than $520 million already being managed for CalPERS by GI Partners had returned 22.2% in the previous 1-year period; and second fund of $61 million had returned 63.4% over the previous year.
Established in 2001, GI Partners is a trans-Atlantic private investment firm that focuses on control-oriented investments in asset-backed businesses and properties in North America and Western Europe. Since inception, the firm has secured $4 billion of capital commitments on behalf of recognized institutional private equity and real estate investors in the U.S., Europe, Asia, and the Middle East. CalPERS has a total of more than $700 million with three GI Partners funds.
RREEF, the real estate investment management business of Deutsche Bank's Asset Management division, acquires and manages investments in commercial and residential property, and real estate securities on behalf of its institutional and private clients worldwide. RREEF has managed CalWest Industrial Properties for CalPERS since 1998.
Last month, CalPERS took away management of $1 billion in multifamily investments from BlackRock Realty Advisors and gave the assignment to GID Investment Advisers LLC, an affiliate of The General Investment & Development Cos.
CalPERS, with approximately $216 billion in assets, is the nation's largest public pension fund.
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Mark Heschmeyer
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