San Joaquin County Employees' Retirement System, Stockton, Calif., approved investing up to 40% of the fund's $34 million real estate allocation in value-added real estate, from 20%, said Robert Palmer, retirement administrator. The board of the $1.7 billion system also expanded the range of opportunistic real estate investments to 0 to 40% of the overall portfolio, from 0 to 15%; narrowed the core real estate range to 40% to 60%, from 20% to 60%; and reduced the range for public REITs to 15% to 24% from 0 to 25%. The board decided there are more opportunities for "better returns" in value-added and opportunistic real estate funds, and there is the "potential" for hiring new managers in these areas, Mr. Palmer said. The system's consultant, ORG Holdings, will screen candidates and make recommendations to board officials in the next 90 days, Mr. Palmer said.
In addition, the board is considering fundamental index investments, Mr. Palmer said. Rob Arnott, chairman and CEO of Research Affiliates, will talk to the board at a special meeting Oct. 4 about the differences between cap-weighted indexes and a fundamental approach.
