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CalPERS to sell $3 bln chunk of real estate portfolio

  • Secondary sale part of ongoing effort to reduce managers
  • Sale likely to include funds from $6.1 bln legacy portfolio
  • Legacy portfolio includes funds from Apollo, BlackRock and TPG

The California Public Employees’ Retirement System tapped Park Hill Group to manage the sale of $3 billion worth of stakes in real estate funds on the secondary market, the public pension announced June 30.

Earlier this month, the retirement system unveiled plans to cut its 200-deep roster of external managers to around 100 relationships by 2020. “The sale of these assets represents the continued effort to reduce costs, risk and complexity across the CalPERS fund,” Senior Investment Officer for Real Assets Paul Mouchakkaa said in a statement. “For the real estate program it will enable us to invest in assets and managers that are more aligned with our current strategy.”

While CalPERS spokesman Joe DeAnda declined to identify the specific fund stakes the pension plans to sell, he did indicate it would likely include holdings from the pension’s $6.1 billion legacy portfolio. The legacy portfolio includes funds that do not “fit the new role of real estate” in CalPERS’ strategic plan, according to pension documents.

The legacy portfolio includes funds managed by Apollo Global ManagementBlackRockStarwood Capital and TPG Capital, among others, according to CalPERS documents.

Park Hill Group is beginning to seek offers from buyers and plans to complete the sale by the end of the year, according to a statement from the retirement system. The total amount CalPERS sells could vary depending on market conditions.

CalPERS real estate portfolio includes approximately $25.5 billion of assets, including its legacy portfolio.

The $303 billion system has been out trying to sell about $1 billion of its private equity holdings, Buyouts previously reported.