Calpers Strips LaSalle of Industrial Real Estate Portfolio, Adds GI, RREEF

The California Public Employees Retirement System replaced LaSalle Investment Management as manager of $1.96 billion of its industrial real estate, handing the work over to GI Partners LLC and RREEF Investment GmbH.

Calpers, as the largest U.S. public pension is known, said today in a statement that GI Partners will manage the fund’s $1.9 billion in North American assets of CalEast Global Logistics. RREEF will manage Calpers’ $60 million of CalEast European industrial assets.

The fund, with investment assets of about $216 billion, is restructuring its real estate division after the value of those holdings fell 11 percent in the past fiscal year through June. The Sacramento-based pension plan provides retirement benefits to about 1.6 million people.

Stefanie Murphy, a LaSalle spokeswoman in Chicago, said the investment manager doesn’t comment on client relationships. The company is a unit of Chicago-based Jones Lang LaSalle Inc.

GI Partners is a Menlo Park, California-based private equity firm. RREEF is the real estate investment-management business of Frankfurt-based Deutsche Bank AG’s asset management division.

The plan dropped a unit of BlackRock Inc. in October as the manager of its $1 billion of holdings in residential apartment buildings. Calpers took that step after it was forced to write off a $500 million investment with BlackRock in New York City’s Stuyvesant Town-Peter Cooper Village through a partnership with Tishman Speyer Properties LP.

Calpers also wrote off a $970 million investment in the past fiscal year tied to the Newhall Ranch project north of Los Angeles. The developer, LandSource Communities Development LLC, entered Chapter 11 bankruptcy reorganization after failing to restructure debts.

To contact the reporter on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.

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