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Tuesday, 16 November 2010

CalPERS' Real Estate Portfolio Sees 12.2 Percent Loss

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The California Public Employees' Retirement System recorded a 13.3 percent net return on its entire portfolio during the 12 months ended June 30. But its real estate portfolio, which had a market value of $15.2 billion, posted a 12.2 percent after-fee loss for the year.

The real estate loss was driven by a 13.9 percent drop in value. The portfolio generated 1.7 percent of income.

Before fees, the portfolio generated an 11 percent loss, which underperformed the 1.5 percent before-fee loss posted by the benchmark NCREIF index.

The $207.3 billion-asset pension fund's core real estate portfolio, which has a market value of $7.1 billion, generated a one-year after-fee loss of 2.7 percent. The loss was 1.9 percent before fees.

Its opportunistic real estate portfolio posted losses of 18.2 percent before fees and 19.7 percent after fees.

CalPERS noted that it aims for real rates of return of 5 percent for both its core and opportunistic portfolios. Since inception, the overall portfolio has generated a 3.4 percent return. Its core portfolio has generated a 4.3 percent return and opportunistic portfolio a 0.9 percent return.

Real estate was the only asset class to see losses. CalPERS' private-equity investments led all classes with a 23.88 percent gain. That was followed by gains of 20.35 percent for global fixed income, 14.42 percent for public stocks and a combined 8.7 percent for commodities, infrastructure, forestland and inflation-linked bonds.

The figures for the total portfolio "confirm our initial assessment a few months ago that we were in a recovery mode," said Joe Dear, CalPERS' chief investment officer.

He also noted that the pension fund saved almost $300 million by reducing fees paid to some investment managers during the year. It also eliminated some low-performing funds from its portfolio.

The loss from the pension's real estate holdings was partly the result of writing down poor-performing investments, such as its $500 million investment in a venture led by Tishman Speyer Properties that paid $5.4 billion for Stuyvesant Town/Peter Cooper Village. The multifamily property was surrendered to lenders after failing to generate sufficient cash flow to fully service its debt.

Comments? E-mail John Covaleski or call him at (267) 247-0112, Ext. 208.

Copyright © 2010 Commercial Real Estate Direct www.crenews.com


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Additional Info

  • Syndicate to Realpoint: No
  • Subject: Institutional Investment (INS), Research (RES)
  • Deal Name: Bear Stearns Commercial Mortgage Securities Trust, 2006-PWR12
  • Company: Camden Property Trust
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Data Digest







Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44




cppichart FP



CMBS 2.0 Spreads


Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41





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