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Calif. pension fund looks to invest $300M in real estate

Orange County Employees Retirement System is looking to invest up to $300 million in real estate during its next fiscal year but may be unable to hit that goal due to market timing, IPE Real Assets reported.

The pension fund plans to direct up to $175 million toward open-ended core property funds and up to $125 million toward noncore real estate during the fiscal year ending June 30, 2019, with plans to reserve capital for noncore strategies in case of a market downturn, the report said.

However, it is late in the current real estate cycle, which could pose challenges for capital allocation, the fund's consultant The Townsend Group said, according to the report.

The consultant advised the fund to shift its focus away from office and retail sectors and toward the industrial sector, while maintaining its weighting to residential markets, as well as adding exposure to Western U.S. markets and decreasing its assets in the East, South and Midwest markets.