CalPERS taps Cheung Kong for Asia Real Estate Investing

Calpers, the biggest U.S. pension fund, said on Friday it would set aside $500 million for investing in real estate in Asia through ARA Asia Dragon Fund, a new fund focused on property opportunities across Asia.

In addition to investing through the fund, sponsored by ARA Asset Management, a member of the Cheung Kong Group, Calpers said it would allocate $500 million to potentially partner with the fund in investments.

ARA Asia Dragon Fund expects about $1.5 billion in commitments from Calpers, officially the California Public Employees’ Retirement System, and other investors not including coinvestment funds, and will target an annualized net return on investment of 18 percent, Calpers spokesman Clark McKinley said.

Calpers’ board president Rob Feckner said ARA Asia Dragon Fund would give the pension fund for California’s state employees an opportunity to profit from investments in Asia focused on residential development projects in fast-growing major cities, commercial projects and underperforming assets in good locations.

“Its primary focus will be on office, retail and residential properties in the key markets of Singapore, Hong Kong, Malaysia and China, where the underlying strengths of the real estate markets are strong and growing,” Feckner said.

Calpers currently has about $3 billion of its $34 billion global real estate program in property investments in Asia.