GI To Manage CalPERS’ $3.4 Billion Real Estate Portfolio

CalPERS and GI Partners have formed a partnership where GI will manage and invest a $3.4 billion portfolio of industrial and logistics related real estate businesses from CalPERS. As part of the deal, CalPERS has transferred its CalEast Global Logistics to GI who will manage it. John Saer, a former KKR partner, has joined GI as an MD and executive chairman of the CalEast businesses.  GI, of Menlo Park, Calif., is a private investment firm. CalPERS is a leading public pension fund.

PRESS RELEASE

The California Public Employees’ Retirement System (“CalPERS”) and GI Partners (“GI”), a Menlo Park, California based private equity firm, today jointly announced the formation of a new partnership in which GI will manage and invest in a $3.4 billion portfolio of CalPERS’ industrial and logistics related real estate businesses. The portfolio transfer of CalEast Global Logistics (“CalEast”) significantly increases the nearly $4 billion of assets currently under management by GI Partners.

CalEast owns and operates industrial, logistics and infrastructure-oriented real estate, including warehouses, light assembly, distribution centers, truck terminals, intermodal centers, and air cargo facilities throughout the United States and Canada. CalEast entities include CenterPoint Properties Trust, joint ventures with Aeroterm and North American Truck Terminals, and numerous development joint ventures. In total, CalEast platforms own and operate over 47 million square feet of industrial real estate and logistics infrastructure.  “We are pleased that CalPERS has selected GI to be its partner in this significant investment,” said Rick Magnuson, founder and Executive Managing Director of GI Partners.  “Our decade long relationship with CalPERS has been mutually rewarding and we look forward to continuing our partnership.”

Concurrent with the transaction, GI Partners announced the addition of former KKR partner John K. Saer, Jr., who joins the firm as a Managing Director and Executive Chairman of the CalEast businesses. In his new capacities, Mr. Saer will oversee a dedicated team of GI executives managing the new CalEast partnership as well as direct GI’s institutional separate account activities. “We are extremely fortunate to have an executive with John’s extensive experience join our firm,” said Rick Magnuson. “John’s combination of private equity and operating experience, including his former roles as head of KKR’s industrial and real estate investment groups, makes for an ideal fit in overseeing logistics related businesses such as CalEast.”

The CalEast portfolio transfer to GI Partners is a continuation of the long-standing, successful relationship CalPERS has had with the firm since awarding it an initial $500 million mandate following a request for proposal process in 2000. Since then the GI team has returned over $1.1 billion of proceeds to CalPERS on its U.S. transactions, with the overall North American portfolio having achieved an annualized net return of 30% since 2001. Following this portfolio transfer, GI Partners will be responsible for assets and investments across North America valued at approximately $7.5 billion.

About GI Partners
Founded in 2001, GI Partners is a leading private investment firm that focuses on control-oriented investments in asset-backed businesses and properties across North America and Western Europe. The firm is active in a number of key sectors, including internet infrastructure, facilities-based healthcare services, leisure, commercial real estate, retail and financial services. Investments have included Digital Realty Trust (ranked the best performing REIT since its creation in 2004), FlatIron Crossing, SoftLayer Technologies, AdvoServ, Ladder Capital Finance, The Telx Group and the recently announced purchase of First Republic Bank. The team’s third fund closed in 2009 with $1.9 billion in committed capital and is approximately 60% invested. GI is headquartered in Menlo Park, CA and has regional offices in London, England; Greenwich, CT; Munich, Germany and Chicago, IL. For more information, please visit www.gipartners.com.