Kansas City (Mo.) Police Employees' Retirement Systems will increase its allocation to real estate by 10 percentage points as a result of an asset allocation study, confirmed James Pyle, pension systems manager.
The pension funds, with combined assets of $826 million, will increase the target to real estate to 15% of overall assets from 5%. The funds' target to alternatives, of which real estate is a part, increases to 35% from 25%.
The pension funds' fixed-income target will be reduced to 20% from 30%. No managers will be terminated; specific implementation of the changes has yet to be determined.
The pension funds' target allocation of 45% to equities will remain unchanged.
Prudential Real Estate, the pension funds' lone real estate manager, will have up to $88 million added to its portfolio; it now has $36 million, said Mr. Pyle in a telephone interview.
The two pension funds are the Police Retirement System of Kansas City and the Civilian Employees' Retirement System of the Police Department of Kansas City.
Investment consultant DeMarche Associates assisted.