San Diego City Employees’ Retirement System (SDCERS) plans to commit $200m (€172m) to real estate in fiscal 2027, as it seeks to reduce its office exposure and move towards non-core strategies.
The pension fund disclosed in a board meeting document that for the fiscal year that began 1 July, it will allocate $150m to non-core real estate equity funds and $50m to non-core debt strategies.
The plan forms part of a broader strategy to lower the pension fund’s core equity exposure from 75% to its 60% target, while raising non-core assets from 25% to 40% and moving retail towards a neutral weighting.
Retail currently accounts for 7% of the pension fund’s real estate portfolio, compared with an 11% weighting in the NFI-ODCE Index.
SDCERS plans to fund its new real estate debt strategy by redeploying capital retrieved from open-ended core debt funds and has already submitted redemptions of $43.5m from the MetLife Commercial Mortgage Fund and $36.6m from the Mesa West Core Debt Fund.
The pension fund also intends to reduce its real estate equity exposure by receiving $22.3m following its redemption from the UBS Trumbull Property Fund.
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