CalPERS increases the core weighting of its $33.4bn real estate portfolio [corrected]

The California Public Employees’ Retirement System (CalPERS) has increased the core weighting of its $33.4bn (€29.8bn) real estate portfolio from 78% to 85% over the past 12 months.

The $380bn pension fund, which has a policy in place not to have less than 75% of real estate porfolio in core assets, said in a board meeting document that it was able to increase its core exposure through $3.4bn of new US real estate acquisitions during the period.

The size of the core real estate portfolio is now $28.5bn.

CalPERS said 36 of the 37 real estate deals involved core assets, and that apartments and office buildings acquisitions accounted for a third each of the total deals.

The pension fund’s apartment managers include Invesco Real Estate, GID Investment Advisors and Pacific Urban Residential. CalPERS has a major office building partnership with Commonwealth Partners.

CalPERS said the remaining deals were evenly split between industrial and retail.

Its industrial managers include BentallGreenOak and GI Partners, and its has First Washington Realty and Miller Capital Advisory as retail managers.

The pension fund’s core real estate portfolio has outperformed its benchmark, the MSCI/PREA US ACOE Quarterly Property Fund Index, over every time period.

The returns were 4.1% for one and three years, 4.4% for five years and 4.5% for 10 years, while the benchmark returned 3.3%, 3.4%, 3.6% and 4.2%, respectively.

A previous version of this story incorrectly referenced the PREA/IPD US Quarterly Property Fund Index as CalPERS’s core real estate portfolio benchmark.

 

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