San Diego City Employees' Retirement System will eliminate its real estate investment trust allocation, said Liza Crisafi, chief investment officer, in an e-mail.
Although the portfolio has performed well over the long term, “the current private real estate portfolio has a broad mix of strategies that provide many of the benefits of real estate securities with lower observed volatility,” said materials prepared by investment consultant Aon Hewitt Investment Consulting for last month's board meeting.
As a result, the $6.5 billion pension fund's $85 million investment with Brookfield Asset Management, its sole REIT manager, will be redeemed.
Assets will be reallocated within the real estate portfolio, which will be discussed further in July, Ms. Crisafi wrote.
The pension fund has an 11% target to real estate overall.