The California Public Employees Retirement System’s (CalPERS) real estate portfolio produced a 13.4% investment return in its last financial year.
Performance over the 12 months to 30 June beat the previous 12 months by 150 basis points.
The plan’s real estate portfolio was the second best asset class from a return perspective, with investments in domestic and international stocks returning 24.8%.
Ted Eliopoulos, interim CIO at the pension fund, said, with the final breakdown of the result still being calculated, income and appreciation would have made equal contributions to the result.
The performance for the 2014 fiscal year also saw the pension fund beat its real estate benchmark by 160bps.
CalPERS uses for the NCREIF Open-end Diversified Core Equity (ODCE) index.
CalPERS is aiming for 75% of its real estate portfolio to consist of core, income-producing assets.
Existing office, industrial and retail properties – as well as apartments – are being targeted by the pension fund, with a main focus on the US.
CalPERS’s real estate portfolio was valued at $24.6bn (€18.1bn) in April this year.
The fund has placed 8.5% of its total $300bn plan in real estate.
The entire investment portfolio produced a return of 18.4% – the fourth double-digit return the pension fund has earned over the last five years.
