UNITED STATES - The University of California Retirement Plan has put plans to increase its  real estate target allocation on hold until markets turbulence and returns have calmed.

The pension fund in September had earlier agreed to move its targeted allocation for real estate from 5% to 7% and was supposed to discussing at a meeting in November how the capital might be allocated

However, Rob Kochis, principal at The Townsend Group, said this meeting has now been cancelled as pension fund official would prefer to make such decisions when the financial markets are not quite as rocky.

"We think that it's best now not to place any new capital into the market, given what has been going on for the last few weeks," said Kochis.

The pension fund is not the only institutional investor to make such a move as Townsend has found few of its other clients are planning to conduct manager searches over the next six months.

Real estate managers are facing a similar response from most other consultants and pension funds and could therefore find it very difficult to attract pension funds to new capital raisings.

Prior to its latest move, the University of California had an active year in real estate investment as it recently placed $100m (€74.9m) into two commingled funds: the $2.5bn Westbrook VIII global opportunity fund, and the Legacy value-added III fund which is buying US office and industrial properties.

The California University pension fund had total plan assets of $42bn on 30 June.

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