San Francisco Employees Retirement System (SFERS) is planning to exit $157m (€140m) worth of real estate debt investments as it reduces its exposure to liquid credit.
According to a board meeting report, the pension fund will terminate a $107m liquid real estate debt account managed by Prima Capital Advisors and a $50m investment in the AFL-CIO Housing Investment Trust.
IPE Real Assets now understands that, at the meeting, the decision to terminate the Housing Investment Trust investment was postponed for 90 days to allow SFERS consider whether to reclassify the investment into another asset allocation category or proceed with the recommendation to terminate. The Housing Investment Trust invests in multifamily-backed securities in the US.
Prima Capital has managed investments for SFERS for more than 20 years, investing in commercial real estate loans, commercial mortgage-backed securities, real estate investment trust bonds and other real estate debt instruments.
But the pension fund is reducing its target allocation to liquid credit to 3%. Its weighting to the asset class stood at 6.2% at the end of February 2018.
Prima Capital produced a net annualised return of 4.57% over the trailing five-year period, according to the board meeting report, outperforming the Bloomberg Barclays US CMBS 2 benchmark (3.53%) and the Bloomberg Barclays US Aggregate Bond Index (2.32%).