Investors - APRIL 16, 2013

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CalPERS looks to core assets to rebalance real estate portfolio

by Sara Kassabian

The $260.4 billion California Public Employees’ Retirement System (CalPERS) has approved a proposal to change its current real estate investment strategy by extending the investment period by two years at its April 15 meeting.

CalPERS’ real estate investment consultant, Pension Consulting Alliance (PCA), advised the extension, noting the current portfolio is out of compliance with four of the target allocations for July 1, 2013. The key area where the portfolio is out of compliance is in portfolio diversification by risk classification, namely the allocation to core. CalPERS has an actual allocation to core of 43.4 percent and a target between 75 percent and 100 percent of its overall real estate portfolio as of September 2012.

PCA intends to sell opportunistic assets and acquire more core assets to rebalance CalPERS’ real

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