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CalPERS establishes investment programs

SACRAMENTO, Calif. - The California Public Employees' Retirement System (CalPERS) has established two equity investment programs totaling $300 million. A $200 million program will invest in seniors housing properties, and $100 million will be invested in "smart growth" urban communities in northern California.

Funding for the seniors housing program should begin this summer, according to CalPERS. During the next few months, the organization will conduct a search for investment managers. The focus of the program will be on independent living facilities, says Brad Pacheco, a CalPERS spokesman, but the fund will also invest in assisted living communities and will consider continuing care communities.

Pacheco says CalPERS does not feel uneasy about making such a commitment to seniors housing, an industry that has struggled at times in recent years. "With the baby boomers retiring, we want to be in on the ground floor," he adds.

With the urban equity program, CalPERS will prefer to invest in mixed-use communities that will promote, among other things, reductions in car use and suburban sprawl, says Pacheco. The program will fund new construction and the renovation of existing buildings in urban areas.

Funding for the urban program is expected to begin by August. Meanwhile, CalPERS will interview 12 real estate firms to find investment partners. The organization is looking for "partners to co-invest in the infill projects and operate under performance-oriented fees schedules," according to a CalPERS press release.

CalPERS has undertaken a similar program before. Last year, the organization established a $100 million partnership with Los Angeles-based CommonWealth Partners LLC to invest in urban areas in Southern California.

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