CalPERS, the California state pension fund, announced recently that it is investing a total of US$530 million int two China real estate funds managed by ARA Asset Management. The fund will invest $480 million in the ARA Long Term Hold Fund and $50 million in ARA’s Asia Dragon Fund II, according to a press release.
CalPERS, which manages assets worth $237.5 billion had already invested $500 million in ARA Asia Dragon Fund I, according to the release, returning an annualized 19.2% for the 12 months ended March 31, and an annualized 8.4% for the three years ended March 31.
In the statement, Joe Dear, CalPERS’ chief investment officer noted, “Income growth and urbanization remain the key themes for growth in China. China’s office and retail sectors offer stable rental income and potential for capital value growth.”
The Long Term Hold Fund will target investments in high-quality office buildings in central business districts and retail malls in suburban areas of cities in China and Hong Kong; the Dragon Fund will primarily focus on retail, office and residential property investment in key Chinese cities and Hong Kong as well as Singapore and Malaysia, Mr. Dear said in the release.