San Diego City Employees' Retirement System's board on March 11 approved a revised real estate policy and investment plan that includes adding a co-investment strategy, committing $75 million to non-core real estate through fiscal year 2022 and a total of $225 million to $250 million to core real estate in fiscal year 2023.
The $10.5 billion system's new real estate investment plan also calls for annual commitments to non-core real estate of $125 million for fiscal years 2022 through 2027. The plan was recommended by staff and its real estate investment consultant Meketa Investment Group.
The board also delegated to staff the authority to make co-investments up to a maximum of 2% of the real estate portfolio if they are with existing SDCERS real estate managers, do not include ground‐up development and can get a an opinion from its real estate consultant that the investment is reasonable.
SDCERS has a 11% target real estate allocation and had 9.4% invested in real estate as of Dec. 31.
Separately, system CEO Gregg Rademacher reported to the board that before the Feb. 24 start of the conflict in Ukraine, the pension plan had $42 million in Russian investments, which were reduced to $18 million once Russia invaded Ukraine. Currently, SDCERS has $2 million in Ukrainian securities and $3 million in Russian investments, Mr. Rademacher said.
