Sacramento Pursues Management Search for $300MM Real Estate Portfolio
Submitted July 18, 2010, 7:35 PM
The Sacramento County Employees’ Retirement System has approved a search for management of a real-estate portfolio currently overseen by BlackRock Realty Advisors.
“We and our real estate consultant, Mercer Investment Consulting, think that it is best to consider the possibility of moving the portfolio to another manager,” said Richard Stensrud, the pension fund’s chief executive officer. “It is likely that there are some very some strong investment managers out in the marketplace that could be of benefit to us.”
Through March, Sacramento County Employees valued the BlackRock portfolio at $291 million across two separate accounts and one commingled fund. A separate account is a partnership between an asset manager and typically one institutional investor. A commingled fund has investments from multiple parties and is overseen by a manager.
Stensrud said in late April that he and Mercer were having reservations about continuing the relationship with BlackRock in the wake of the retirement of Fred Lieblich, the former global chief investment officer for BlackRock Realty. Mercer declined comment for this story. BlackRock did not return a call.
BlackRock is a global asset management company whose clients include public, private, union and industry pension funds, insurance companies, endowments, foundations, sovereign wealth funds and others. At the end of the first quarter, the company listed $3.36 trillion in assets under management. The company also offers risk management, advisory and other services. BlackRock, which is publicly traded, will report its second-quarter results July 21.
Meanwhile, the Sacramento County pension board has hired Mercer as a dedicated real estate consultant. In the past Mercer was the pension fund’s general real estate consultant, doing work on its portfolio on an as-needed basis. Mercer will receive $175,000 on an annual basis going forward. The fee previously paid to Mercer for general consulting was $150,000 a year.
The Sacramento County employees pension fund has 25,550 members. Its real estate portfolio was worth $780 million, which is 15 percent of total assets at the end of last year, the most recent tally available.
