The San Francisco City & County Employees' Retirement System might change its $923 million real estate portfolio. Staff at the $11.7 billion pension fund and real estate consultant Townsend proposed rebalancing the real estate portfolio toward 45% core, 45% value and 10% high return, making new allocations to core and value as existing assets are sold off. The current mix is 45% core, 38% value, 15% high return and 2% short-term financing. The real estate portfolio returned 7% for the year ended Sept. 30, below the board's 12% target return. The system's board will review the recommendations Feb. 10.
RREEF's allocation, comprising 45% of real estate assets, likely will shrink through new allocations to other managers. Staff also recommended rescinding an unstated unfunded allocation to a $50 million INVESCO value-oriented mandate because of disappointing returns and management issues. Staff urged that INVESCO focus on the $133 million core real estate portfolio it also runs for the fund.
Bill Hensel, a spokesman for INVESCO, declined to comment.