Following the agreement of its board to terminate its contract with Townsend Group in August 2010, Colorado Fire and Police Pension Association (CFPPA) opted to widen the scope of services it receives from Hamilton Lane. Hamilton Lane, the Pennsylvania–based investment consultant which already provides the pension fund with consulting services covering the private equity asset class, will now also oversee the private equity real estate investments of CFPPA. For an extra fee of $100,000 per annum, Hamilton Lane will advise on private real estate investments and maintain the back office and reporting for such investments. However, CFPPA staff will undertake primary responsibility for the core real estate fund investments made by the pension fund.
With this appointment, CFPPA is making savings of $52,500. CFPPA investment staff discussed the decision with its general consultant, Pension Consulting Alliance (PCA), which provided concurrence in support of their recommendations. In the same meeting, CFPPA noted that it has also requested (which Townsend Group did not support) to immediately redeem in full a number of the open-end value added real estate funds in its portfolio.
CFPPA began investing in the private equity real estate market in 2006, when Townsend Group recommended that its allocation to private equity real estate funds should comprise 35% of its total allocation to real estate. Set in early 2010, CFPPA has a 5% target allocation to real assets. Its real estate portfolio is heavily weighted towards core property, with 86% of its allocation in core vehicles and the remaining 14% in private equity real estate funds.
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