FPL Advisory Group Report: Pension Commitments to Real Estate Increased Significantly in 2012

Posted on March 6, 2013 in Viewpoints by admin

Commitments to real estate managers by U.S.-based public pensions increased materially in 2012, according to data tracked by FPL Associates Consulting. Per FPL’s proprietary database, over 300 commitments were made in 2012 representing $31 billion in equity. This compares favorably to the $24 billion committed in 2011. The database includes commitments to over 150 managers from 110 public pensions representing $2.7 trillion in assets under management.

The average commitment size was $92 million in 2012, a figure that is highly consistent with that of 2011. However, there is a significant disparity between average commitment size by vehicle type. As one would expect, on average, commitments made to separate accounts tend to be substantially larger than those made to commingled funds. The average commitment size to separate accounts rose to $279 million in 2012, from $227 million in 2011, while the average commitment to commingled funds stayed
relatively flat ($63 million versus $70 million in 2011).

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