San Diego County Employees Retirement Association could invest $500m (€430m) in real estate between now and 2017 as it looks to reach its target allocation of 10%.
According to board meeting documents, San Diego is considering placing this capital with existing and new real estate managers.
The pension fund, advised by consultant The Townsend Group, is considering hiring a manager for a new separate account.
It is also considering investing in commingled funds to gain access to niche investment strategies, as well as real estate investment trusts (REITs).
The fund has previously placed capital with CBRE Global Investors, Blackstone, Cornerstone Real Estate Advisers, JP Morgan Asset Management, Pramerica Real Estate Investors and Deutsche Asset & Wealth Management.
San Diego will look to rebalance its portfolio, moving from an even split between core and non-core investments to a 70-30 weighting, a move that will be aided by some of its existing opportunity fund investments coming to an end.
The expected return for the new portfolio weighting is around 7.5%, with a standard deviation of 10.8%, according to Townsend.