California Public Employees' Retirement System (Calpers) announced its sale of $3 billion worth of real estate holdings to Blackstone Group LP.
Calpers, in a move to restructure its portfolio, has released a statement saying that a total of $3 billion in real estate holdings have been acquired by Blackstone Group LP. According to The Wall Street Journal, the deal is equivalent to 10 percent of Calpers' real estate assets which include a stake in 43 domestic and international funds. It has been announced earlier in the year that Calpers planned to dispose of commercial properties that were purchased at the time of the last financial crisis.
It was also mentioned in the same report that this move by Calpers is aimed at separating itself from real estate and other funds. It is included in their massive plan to scale down its portfolio and try to lower the fees they charge pensioners. In June of this year, the fund revealed that it plans to separate from about 50 percent of its external fund managers by the end of 2020. The sale of the real estate holdings is seen as part of the first phase of the strategy they announced.
A unit of Blackstone called the Strategic Partners Fund Solutions is the buyer and its main focus is on private equity and secondary real-estate assets. Paul Mouchakkaa, fund overseer for real estate investments said, "This sale allows Calpers to focus on our strategic plan and on investing in assets and managers that better align with our real estate goals."
Meanwhile, in a report by The Sacramento Bee, a recent glitch that stopped the service-credit billing and payroll deductions of Calpers was discovered to be caused by a computer software update that was made some three years ago. Calpers reported that the flaw affected 2,257 people who bought extra retirement service credit among many others.
