The California Public Employees’ Retirement System , the nation’s largest pension fund with more than $174 billion in assets, is therefore looking for an investment partner with core competencies in real estate and venture capital. Potential candidates will be interviewed within the next five weeks.
As commercial tenants demand more Internet, e-commerce, and telecommunications infrastructure, buildings in high-tech markets like Silicon Valley, Boston’s Route 128, and Raleigh/Durham’s Research Triangle Park offer enticing additions to real estate portfolios.
Such acquisitions will comprise 75% of the new CalPERS program’s portfolio, with the remainder focused on:
- investments in telecommunications firms, online property listing services, and energy management firms
- strategic real estate partnering and possible equity investments in high growth tenants
CalPERS already has some experience partnering with tenants who need high-speed communications services. Through a joint real estate venture with Hines, the fund has interests in two broadband communications companies:
- Broadband Communications in Falls Church, Virginia
- Allied Riser Corporation in Dallas, Texas
CalPERS also has a $500 million direct investment in Enron, an energy services provider to property owners. The fund is planning to leverage its existing knowledge and contacts from its existing $8.3 billion real estate portfolio and $10.4 billion alternative investments portfolio.
The move appears to reinforce CalPERS’ bet that “very attractive returns” are expected in technology based ventures, as reported April 19 by PLANSPONSOR.com.