UNITED STATES - Fresno County Employees' Retirement Association has increased its real estate allocation from 4% to 6% and added an allocation of 2% to infrastructure for the first time.
Roberto Pena, the pension fund's retirement administrator, said the allocations are part of an 11% alternatives allocation to achieve diversified returns purposes, as the remaining 3% is being invested in commodities.
"The moves that we have made here were done as a way to give us a better chance of achieving higher returns for our overall portfolio. Diversification was a factor in our decision as well," said Pena.
The other asset classes affected by this shift were the US large cap equity portfolio which saw its allocation drop from 28% to 23.7% and international large cap equity reduce from 15% to 12.2%.
Fresno County now has a real estate portfolio valued at $101m (€68.7m), which means 3.7% of the pension fund's $2.75bn in assets under management are now invested in real estate.
The pension is already investing with a variety of real estate managers, including ING Clarion, TA Associates and JER Partners but Fresno County is now putting together an implementation plan with its consultant Wurtz & Associates so the new capital allocation can be discussed at the pension fund's board meeting on 3 September.