The California Public Employees Retirement System (CalPERS) real estate investment consultant called on the pension fund to expand its investment vehicles to include more vehicles like funds and co-investments to help meet a new allocation target real estate.
Meketa Investment said in a meeting document that the $481.2 billion (€415.8 billion) pension fund will likely need to invest in a wider range of investment vehicles than in the past to reach its target. new real estate allocation target.
CalPERS is expected to increase its real asset allocation by 13% to 15% in fiscal year 2023 starting in July. Real estate represents 82.1% of the portfolio of real estate assets.
CalPERS, which invests primarily in real estate through direct investments with separately managed accounts, has not met its target allocation in the past 10 years.
Core real estate, which accounts for 88.2% of the pension fund’s $45 billion (€39.3 billion) real portfolio, posted a five-year net return of 7.4% compared to the MSCI/PREA benchmark index of 6.5%. On a 10-year basis, returns were 12.6%, beating the benchmark by 360 basis points.
To read the latest edition of the latest IPE Real Assets magazine, click here.