San Diego City Employees' Retirement System's board at its Sept. 8 meeting committed $25 million to real estate debt fund, Torchlight Debt Fund VIII.
The $10.6 billion pension fund has committed a total of $90 million to Torchlight Investors funds Torchlight Debt Funds IV, V & VI, a staff report shows. The pension fund's fiscal year 2024 real estate commitment plan includes committing a total of $100 million to three or four noncore funds. This is the first noncore real estate for fiscal year 2024.
Separately, the pension fund earned a net 5.2% for the fiscal year ended June 30, underperforming its 7.6% benchmark.
The pension fund's returns were a net annualized 8.9% for three years, above its 8.1% benchmark; a net annualized 6.8% for five years, under its 7.1% benchmark; and a net annualized 7.7% for 10 years, besting its 7.6% benchmark.
Pension fund officials said that the main detractors to its fiscal year performance were private equity, which underperformed its benchmark by 2.9 percentage points and the opportunity fund, which underperformed by 13.9 percentage points.
Private equity's underperformance was driven by valuation write-downs over the past six months. The main detractor from the opportunity fund's performance was managed futures, which struggled during market inflection points over the past six months, posting negative returns for the fiscal year, the report said.
U.S. equity was SDCERS best performing asset class for the fiscal year with a net 18.9% return, on par with its benchmark, followed by global equity at 17.7% vs its 16.5% benchmark. Private equity was the worst performing asset class at -7.8%, underperforming its -4.9% benchmark.
The pension fund reported a net -1.7% for fiscal year 2022.
The pension fund as of June 30 had 21% invested in U.S. equity, 20.6% in U.S. fixed income, 13.6% in non-U.S. equity, 13.2% in private equity, 11.9% in real estate, 6% in an opportunity fund, 5.6% in global equity, 5.1% in total return-seeking fixed income and 3.1% in infrastructure.