CalPERS' investment committee on Monday temporarily dropped its real estate target allocation to 8% until Dec. 31, from its current interim target of 10%, as part of an interim asset allocation that also increases its global equity allocation by one percentage point to 50%, according to Clark McKinley, spokesman for the $235.9 billion system.
Next year, the California Public Employees' Retirement System, Sacramento, will raise the target to 9% through Dec. 31, 2012.
The system's real estate consultant, Pension Consulting Alliance, and investment staff recommended that the system slow down its investment pace while real estate prices are high.
Separately, the investment committee moved its Fan Long Only strategy to its global equity fund portfolio from its equity developmental program and increased the allocation to up to 1% of its $108 billion global equity portfolio, or to roughly $1 billion, from $100 million.
The portfolio is managed collaboratively with Stephen C. Fan, president and chief investment officer of investment manager Fan Asset Management, and is based on Mr. Fan's investment principles and stock ranking models.
CalPERS will also commit up to $200 million to a new emerging real estate manager program. System officials will review the program in two years to assess its performance. They will decide at that time whether to decrease, increase or stop the program. In the interim, there will be a report to the investment committee after one year.