US - The Pennsylvania Public School Employees' Retirement System (PSERS) has pulled out of $925m (€724m) worth of real estate commitments.
The US pension fund will no longer commit to five real estate commingled funds as the portfolio is now overweight in real estate investments.
Evelyn Tatkovski, a spokesperson for PSERS, said: "We did not have signed contracts on these deals. We decided not to fund them at this time due to the fact that our allocation to this asset class has increased due to the denominator impact."
"PSERS staff made the prudent decision to not increase our unfunded commitments at this time. This decision has nothing to do with the quality of the funds and we would still consider them if they were still open when the situation changes," she added.
The funds in question are run by Carlyle Group LLC, Strategic Capital Partners, Beacon Capital Partners, Stockbridge Real Estate Funds and Mesa West Capital.
PSERS said despite the board having approved the commitments it was not legally bound to making the investments because the documents had not been signed.
As of 31 December 2008, PSERS' real estate market value was $5.76bn and represented 12.7% of the pension fund's total investments. The target allocation to real estate currently stands at 12.5%, up approximately by 2% increase from June 2008.
PSERS' net assets fell from $62.7bn in June 2008 to $54.7bn by 30 September 2008 because of investment losses and benefit payments, and then dropped again by 31 December 2008, when the total value of PSERS' investments was $45.3bn.
The pension fund's membership has over 279,000 active school employees and 176,000 retirees and beneficiaries.
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