San Francisco City & County Employees Retirement System will increase its stake in AMB Partners II to 80% from 50% for $35 million, as well as pumping an additional $75 million into the co-investment pool of industrial properties. The increase will move the $10.5 billion pension fund toward its new 12% real estate target allocation, which was raised from 8% last month. The deal will offer the fund a 9% cash-on-cash yield in familiar properties and has low transaction costs, said Clare Murphy, executive director.
At its September meeting, the board will decide when to launch a series of searches for equity managers, including enhanced S&P 500 (ex-tobacco) and active large-cap value equities, and how to implement its new asset allocation. The system reduced U.S. equities by one percentage point to 31% and trimmed international stocks three percentage points to 15%. Fixed income and alternatives remained stable at 30% and 12%, respectively.