The California Public Employees Retirement System (CalPERS) has outperformed its real estate benchmark despite suffering poor performance across its wider investment portfolio.

CalPERS reported a 13.5% net return for real estate for the past 12 months, outperforming all other asset classes in the portfolio as well as the NCREIF Open-End Diversified Core Equity (ODCE) Index.

The $301bn US pension fund missed its overall target of 2.5% for the 2014-15 fiscal year, returning 2.4% at the portfolio level, in part due to double-digit negative returns (-11.5%) posted by inflation assets.

Infrastructure came in at second, returning 13.2%, while forestry produced a negative result of -0.3%. Real assets, as a whole, returned 12.4%.

CalPERS, which is selling as much as $3bn (€2.7bn) of real estate fund holdings as part of a manager reduction programme, said the real estate return was made up of around 9.5% of capital appreciation and 4% of income.

The $25.5bn real estate portfolio makes up around 10% of the pension fund’s total assets.

Ted Eliopoulos, chief investment officer for the pension fund, said in a conference call that it is “too early to tell what impact this move will have on the real estate portfolio in the future”.

He said: “We have just started the process.”