July 11, 2011
External Affairs Branch
Robert Udall Glazier, Deputy Executive Officer
Brad Pacheco, Chief, Office of Public Affairs
Contact: Clark McKinley, Information Officer
CalPERS, Hines Earn $160 Million Profit from Brazil Real Estate Fund
SACRAMENTO, CA – The California Public Employees' Retirement System (CalPERS) and Hines, the international real estate firm, have earned a profit of $160 million from a Brazilian fund that has closed after selling its office, residential and logistics projects in São Paulo, Rio de Janeiro, Curitiba, and other cities in the State of São Paulo.
The investment in the Hines CalPERS Brazil Fund I generated a 60 percent internal rate of return. CalPERS invested $95 million in the fund, which was formed in 2005 with $100 million in equity.
"These significant earnings are a credit to the fine work of Hines and an affirmation of our new strategy to deploy up to 15 percent of our real estate capital to growth markets like Brazil and China," said Joseph Dear, CalPERS Chief Investment Officer. "We're excited about our prospects in these emerging markets to build portfolios of high-quality, income-producing assets and development projects."
Hines has operated in Brazil for 13 years. The company also invests for CalPERS in a second HCB fund and in other global markets, including China.
"Brazil is Latin America's largest economy with increasing earnings, a growing middle class and favorable demand for the development of shopping centers, warehouses, offices and residential units," said Ted Eliopoulos, Senior Investment Officer for the CalPERS real estate program. "We have an investment strategy in place to take advantage of the opportunities."
Hines is a privately owned firm involved in global development and property management, with offices in 106 cities in 17 countries and controlled assets valued at approximately $23.7 billion.
CalPERS is the nation's largest public pension fund with approximately $240 billion in market assets. It administers retirement benefits for 1.6 million active and retired State, public school, and local public agency employees and their families and health benefits for 1.3 million members. For more information about CalPERS, visit www.calpers.ca.gov.