CalPERS picked Adelante Capital Management to run a domestic real estate securities portfolio that will be permitted to short stocks, according to the pension fund's agenda for its Aug. 11 investment policy subcommittee meeting. The size of the allocation was not disclosed.
Staffers of the $205.8 billion California Public Employees' Retirement System, Sacramento, proposed the defensive strategy because they think the fully priced U.S. real estate market may be "poised for a correction," according to a staff memo to the subcommittee. Adelante will be able to sell short "with certain limitations," the memo said.
Further details are not available because the investment was approved in closed session, spokesman Brad Pacheco wrote in an e-mail to P&I Daily. The fund and the manager are still negotiating terms of the contract, he added.
Pension Consulting Alliance is the consultant.