The Wall Street Journal is reporting more interest from big pension funds in riskier or distressed properties being offered by so-called “opportunity” funds. With big funds like CalPERS losing an estimated $10 billion in real estate investments during the market downturn, most moved to investments in more stable properties. But with interest rates at historic lows muting yields on safer investments, some pension funds with short memories are investing in riskier properties as they chase double digit returns.
The $25 billion raised by opportunity funds is double the amount raised in 2009, and is being led by big names like KKR, TPG Capital and Blackstone. Some of them are eyeing investors in 401(k) plans, not just large pensions.
