CalPERS staff seeks greater investment flexibility with subclasses of the pension fund's $11.9 billion real estate allocation. In the system's non-core real estate portfolio, California urban real estate and single-family housing would each expand to up to 30% of total real estate equity, from up to 15%, while natural resources and opportunistic strategies would remain at up to 15% each. Overall, non-core real estate will continue to comprise 20% to 50% of total real estate, while core will remain at 50% to 80% for the Sacramento-based fund.
In core investments, apartment, industrial office and retail would range up to 35% each; the minimum threshold for each category now is 10%. Also, core and non-core public real estate securities would be combined into one category and capped at 15% of total real estate exposure, instead of 10% each. And exposure to land would increase to up to 5% from up to 3%.
The proposed changes will be reviewed by the $166 billion California Public Employees' Retirement System's investment committee on Sept. 13. Pension Consulting Alliance assisted.
Separately, CalPERS staff committed up to $305 million to five private equities funds: $200 million to Hellman & Friedman Capital Partners V, a buyout fund; $10 million to Landmark Equity Partners XI, a secondary private equity fund headed by Francisco Borges, former Connecticut state treasurer; $10 million to Leeds Weld Equity Partners IV, a middle-market buyout fund; $54 million to Polish Enterprise Fund V; and $31 million to Richard Financial Group Private Equity, a Canadian fund.
