The California State Teachers’ Retirement System (CalSTRS) has appointed RCLCO to replace The Townsend Group as its real estate consultant.

Harry Keiley, investment committee chair at the $215bn (€184bn) pension fund, said Towsend had advised CalSTRS for nearly a decade, during which time it helped “manage and lower the risk in the real estate porfolio, as well as implement a modified benchmark that aligned with a more conservative strategy”.

In August, following a request, CalSTRS received eight proposals for real estate consultant services. PCA, RCLCO and the incumbent Townsend were shortlisted.

“RCLCO impressed upon us that they add perspectives from operators in the industry, which will incorporate fresh insights to future strategic and policy discussions,” Keiley said.

“Retaining the services of specialty consultants – like RCLCO – is not only a board policy requirement, but is significant to the performance of our fiduciary responsibilities.”

The pension fund said RCLCO’s three-year contract will begin in March next year, with a possible two-year extension. Townsend’s contract ends in February 2018 after serving for the past nine years.

RCLCO will help monitor and comment on real estate portfolio performance and policy matters, but is excluded from recommending individual investment opportunities.

The pension fund’s real estate portfolio was valued at $25.4bn in March, representing 12.2% of its total assets.

CalSTRS is below its 13% target allocation to real estate. It would need to make $1.6bn of new investments to reach its target, according to a board meeting document prepared by Townsend.

Townsend said the pension fund is likely to remain below its target real estate allocation but well within the policy range of 9% to 15%.