The California Public Employees’ Retirement System (CalPERS) has allocated $350 million toward the Canyon Catalyst Fund (CCF), a discretionary account managed by real estate investment firm Canyon Partners Real Estate LLC (CPRE). Though the CCF currently invests in industrial, mixed-use, multi-family, office and retail projects in urban markets within California, the fund intends to expand investments to Phoenix and Seattle and add self-storage and student housing as sectors of interest, according to a press release.
CalPERS is the pension fund for state, school and public-agency members in California. The CCF is the system’s “real estate emerging-manager program” designed to “generate appropriate risk-adjusted investment returns by identifying early stage funds with strong potential for success,” the release stated. As fund manager, CPRE facilitates investment by identifying “real estate emerging managers with niche strategies.”
CalPERS has committed $1 billion to the fund since 2012. The CCF currently has investments in 27 assets statewide, with the platform partnering with five managers: BKM Capital Partners LP, Pacshore Partners LLC, Paragon Commercial Group LLC, Rubicon Point Partners LLC and Sack Properties Inc.
“We are extremely pleased with the success of the Canyon Catalyst Fund,” said Paul Mouchakkaa, managing investment director for real assets for CalPERS. “Our partnership with Canyon Partners Real Estate is off to a strong start and has added value to CalPERS’ real estate portfolio. CalPERS’ longstanding commitment to emerging managers is reflected in our expanded investment with Canyon.”
CPRE is the real estate direct-investing arm of Canyon Properties LLC. As manager of the CCF, it “sources, selects and manages talent, while also maintaining oversight of all platform investments,” according to the release. Founded in 1990, Canyon Properties is a Los Angeles-based investment-management firm with approximately $23 billion of assets under management.
CalPERS has served public employees in California for more than eight decades. Its pension fund serves more than 1.9 million members in the retirement system and administers benefits for more than 1.4 million members and their families. Its total fund market value is currently about $339 billion.