California Public Employees’ Retirement System (CalPERS) plans to invest up to $4.8bn (€4.1bn) in real estate over the next 12 months.

The $352bn pension fund will set aside $1.4bn to maintain and improve existing holdings and $3.4bn for new investments through its separate account managers and new commingled funds, according to documents seen ahead of its board meeting on Monday.

However, the pension fund’s real estate consultant, Pension Consulting Alliance (PCA), acknowledged in the board meeting report that it will be difficult to deploy such a volume capital into today’s persistently competitive markets.

The $4.8bn deployment figure is greater than the $4.2bn target set during the previous 12 months. But by the end of April, CalPERS had only managed to deploy 25% of its committed capital.

During the same month, Paul Mouchakkaa, head of real assets, told the annual INREV conference in Dublin that the pension fund was under-allocated to real estate.

By the end of June, CalPERS had $31.8bn invested in real estate, representing 9% of its total portfolio.

CalPERS’s heavy strategic weighting to core assets, which should make up 75% of its $31.8bn real estate portfolio, could also make it difficult to hit its target for the current fiscal year.

PCA said the “deployment of new investment is expected to remain challenging due to significant capital pursuing core assets”.

But, it said: “With room in the real assets allocation and significant dry power available, the programme is well positioned to assess and execute on sizeable off-market opportunities that may arise and/or to take advantage of any potential re-pricing in the market.”

PCA added: “The pension fund is looking at selectively expanding its existing manager relationships to broaden geographical footprints and/or broaden strategic mandates towards the goal of increasing high quality deal flow.”