CalPERS Awards Apartment Real Estate Investment Management Contracts; Real Estate Firms To Co-invest With Pension Fund

Business Wire, Sept 8, 1997

SACRAMENTO, Calif.--(BUSINESS WIRE)--Sept. 8, 1997--The California Public Employees' Retirement System (CalPERS) has chosen SSR Realty Advisors (SSR) and General Investment & Development Co. (GID) to manage the System's $539 million apartment portfolio.

In a significant move, both firms will co-invest equity with CalPERS in its existing apartment investments and future apartment acquisitions.

SSR Realty Advisors, through its office in San Francisco, will manage the West region of CalPERS Apartment portfolio consisting of 13 complexes valued at more than $280 million. The firm will invest a total of $20 million with CalPERS in the pension fund's existing apartment portfolio properties and future acquisitions in the West region.

GID, based in Boston, Mass., will co-invest in and manage the East region of CalPERS apartment portfolio consisting of nine properties valued at more than $259 million. GID will invest upwards of $25 million in the existing portfolio and future acquisitions in the East region.

"SSR and GID are well positioned to manage CalPERS apartment portfolio," said Charles P. Valdes, Chair of CalPERS Investment Committee. "Each firm has excellent depth and breadth of management expertise in the apartment sector. They have strong investment track records and offer CalPERS a value-added approach to investing that will help us capture significant returns for the System."

SSR and GID will assist in the design and structure of apartment investment strategies and will implement these strategies through acquisition, asset management, development and disposition of investments.

"The desire of these firms to co-invest significant equity with CalPERS and dedicate a management team to the partnership differentiates these relationships from the conventional advisory structure," said David Gilbert, CalPERS Senior Investment Officer for Real Estate. "These new alliances effectively align interests of management with CalPERS and provide them with broad investment discretion, creating an environment where responsibility and accountability are crystal clear."

SSR Realty and GID are anxious to begin work with CalPERS under the new management structure. "We believe that the CalPERS model will be adopted by other leading public pension plan sponsors in the future," said Ronald Zuzack, Managing Director of SSR Realty. "Under this new strategic alliance with CalPERS, we will co-invest in existing and future assets, exclusively dedicate resources to this account, and further align our interest and fees with CalPERS investment returns."

Robert E. DeWitt, Senior Vice President and Chief Investment Officer of GID, expects that this will be the beginning of a long, mutually rewarding relationship. "We have a shared strategic vision and alignment of interest which should ensure a long and mutually profitable joint venture."

CalPERS selection of apartment real estate advisors marks the first management selection since the adoption of the System's new real estate strategy last year. The System is currently conducting nationwide searches for real estate investment firms to manage its remaining industrial, office and retail portfolios.

CalPERS core real estate portfolio of apartment, office, industrial and retail properties is valued at approximately $4.2 billion. Approximately 10-20 percent of its real estate assets are targeted for investment in apartments.

SSR Realty Advisors is a national real estate investment firm with corporate offices in San Francisco and White Plains, N.Y. SSR has over $2.6 billion in real estate assets under management on behalf of approximately 180 institutional clients. The selection of SSR continues an eight-year relationship with CalPERS. SSR Realty's predecessor firm, Metric Institutional Realty Advisors, has served as a real estate advisor for CalPERS since 1989 and currently manages an apartment portfolio valued at $1 billion, of which $240 million is managed on behalf of CalPERS.

GID is a privately held, vertically integrated real estate operating company specializing in the acquisition, re-development, direct property management, and disposition of multi-family residential apartment communities. GID currently owns and manages over 15,300 apartments in 45 communities.

CalPERS is the nation's largest public pension fund with assets of nearly $120 billion. The System provides retirement and health benefits to more than one million public employees and their families.

CONTACT: CalPERS -- Office of Public Affairs

Brad Pacheco/Pat Macht, 916/326-3991

http://www.calpers.ca.gov