CalPERS’ real estate fund returns 7.8% year-over-year

The $329.9 billion California Public Employees’ Retirement System has reported a 7.8 percent total return for its real estate fund, beating its benchmark by 110 basis points for the year ending Dec. 31, 2017, according to an executive summary report of CalPERS’ investment performance by Wilshire Associates. Pension Consulting Alliance reviewed the summary report.

Per staff’s analysis, the 110 basis points of one-year outperformance can be attributed primarily to strong returns from core holdings, which comprise 78.7 percent of the real estate portfolio. Particularly strong returns were generated by the industrial, retail and emerging manager programs.

The three-year return of 10.0 percent and the five-year return of 10.9 percent increased by 20 basis points and 30 basis points, respectively, compared to the benchmark.

During July through December 2017, CalPERS’ real estate portfolio continued its positive transformation toward a diversifying, income-ori