SDCERA to halve its private real assets target allocation

The US public pension is targeting a 3% allocation to real assets by 2021.

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Institution: San Diego County Employees’ Retirement Association
Headquarters: San Diego, United States
AUM: $11.94 billion
Allocation to alternatives: 20.9%

San Diego County Employees’ Retirement Association has reduced its target allocation to private real assets from 6 percent to 3 percent of its investment portfolio, according to the revised Investment Policy Statement presented at its June retirement board meeting. The US public pension is aiming to achieve its desired target allocation by 2021.

The pension believes that with the current valuation of private real assets combined with single-digit returns since inception, it would be prudent to reduce allocation to private real assets while increasing investments in public equity markets.

As illustrated below, the pension’s private real assets allocation, which includes agriculture and infrastructure investments, currently accounts for 5.3 percent of the institution’s total portfolio.

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