The California Public Employees’ Retirement System (CalPERS) is selling what could amount to $3bn (€2.7bn) of real estate fund holdings as it embarks on a portfolio-wide manager reduction programme.

The $300bn pension fund has hired secondary-market specialist Park Hill Group to help sell a legacy portfolio of holdings in property funds invested in the US, Europe, Asia and India.

It marks the first move under a new plan to reduce the number of external managers used across a number of asset classes from approximately 200 to 100 by 2020, replacing them with larger and more strategic relationships.

The news comes soon after CalPERS sold its interest in real estate investment manager Bentall Kennedy and announced it was increasing the size of its emerging managers programme.

“The sale of these assets represents the continued effort to reduce costs, risk and complexity across the CalPERS fund,” said Paul Mouchakkaa, CalPERS senior investment officer for real assets.

A CalPERS spokesman told IP Real Estate that the objective is to sell “everything in the legacy portfolio,” excluding housing. The proceeds will be reinvested in real estate.

The total amount for sale could vary based on market conditions and what the real estate market can absorb. The spokesman said CalPERS is “open to selling [the legacy portfolio] whole or in pieces”.

The CalPERS legacy property portfolio includes 80 funds with a value of $6.16bn, as of September last year, according to the CIO Performance Report for December 31, 2014. In contrast, the strategic property portfolio includes just 39 managers investing a total of more than $19bn in capital.

The portfolio includes domestic and international funds.

CalPERS said Park Hill, an alternatives placement agent and secondary advisory affiliate of Blackstone Group, will immediately begin seeking offers from interested parties on the secondary market, and “plan to have a deal completed by the end of 2015.”

Blackstone did not reply to an email requesting comment on the appointment.

Many of the managers in CalPERS legacy portfolio have small allocations, some as low as $3 million, with many in the range of $12m to $70m.

One of the biggest managers in the legacy portfolio, Starwood Capital, had an allocation of $176m in the Starwood Capital Hospitality Fund I-2 fund, and $310m in Starwood Capital Hospitality Fund II Global fund.

Other major managers with allocations in the legacy portfolio include CBRE Global Investors, with about $48m in three UK and European funds, and BlackRock, with $74m in two funds.

CalPERS’ total fund market value currently stands at approximately $300 billion, with about $25.5bn in commercial, industrial and residential property assets.