The Fresno County Employees’ Retirement Association (FCERA) has increased its allocation to real estate by more than 50 percent boosting the asset class' target to six percent from four percent.
The $2.7 billion (€1.8 billion) pension fund currently has about $101 million committed to real estate, accounting for 3.7 percent of the fund’s total investment portfolio. The increase comes as the pension increased its target allocation to private equity from six to 7.1 percent, during an August board meeting.
FCERA has an estimated $127 million committed to private equity, according to the pension's website, accounting for roughly 4.7 percent of the fund portfolio.
During the meeting, the pension approved plans to create a new “real asset” asset class, encompassing real estate and a new investments in infrastructure and commodities. The target allocation to real assets will be 11 percent, with infrastructure and commodities receiving allocations of two and three percent, respectively.
“We felt it was time to bring a new asset allocation to the board,” Roberto Pena, FCERA retirement administrator, told PERE's sister website, PEO. “There wasn’t any particular event or decision, it was actually a part of our regular business structure.”
Like many other US pensions battered by the poor performance of the public markets, Fresno's retirement system also opted to reduce its US large cap equity exposure from 28 percent to 23.7 percent and its international large-cap equity from 15 percent to 12.2 percent.