SACRAMENTO, Calif. — CalPERS, the nation's largest pension plan, is making sweeping changes to its $23 billion real estate portfolio, moving most of it to non-core investments, with half of the total portfolio to be invested overseas within three to five years.
Now, 61% is invested in non-core real estate and only $2.3 billion is committed to international. The shift toward non-core is expected to continue, because 64% of CalPERS' commitments are to non-core investments.
"It's a shift, but I think it is pretty reasonable," said Michael B. McCook, senior investment officer-real estate for the $197.5 billion California Public Employees' Retirement System, Sacramento.
"This is a global economy and will only get more that way."
By the end of this year, all the elements that would allow officials to increase international real estate to 50% of the portfolio are expected to be in place, Mr. McCook said.