Colorado Public Employees' Retirement Association, Denver, approved a plan to cut REITs and mortgages from the $31.8 billion fund's real estate portfolio - targeted at 7% of assets - to make it more reflective of "pure real estate" and to avoid overlap with other asset classes, said spokeswoman Katie Kaufmanis. REITs and mortgages will gradually be moved to the domestic equities and fixed-income asset classes, Ms. Kaufmanis said.
The real estate asset class will operate under the following guidelines: the stable sector minimum is at 30%; the enhanced sector is unconstrained; the high return sector will be at no more than 20%;and the international sector is between 10% to 20%. Staff will implement these risk constraints "as soon as practical, but no later than Dec. 31, 2007," according to a news release.
Separately, the fund will invest $225 million in the Warburg Pincus Private Equity IX. The fund's alternatives asset allocation target is 8%, with a range of 5% to 11%, and the current allocation is 9.2%.