Kansas Public Employees Retirement System reevaluates real estate exposure for 2023

The $24.8 billion Kansas Public Employees Retirement System (KPERS) has proposed a real estate pacing plan for 2023 to temper its core exposure in line with its targets.

KPERS’ near-term exposure to real estate is projected to slightly exceed the 13 percent long-term target allocation at the end of 2022. Based on current assumptions, by the end of 2023, KPERS’ real estate exposure may approach 15 percent, the upper end of the targeted range.

KPERS invests in both core and noncore real estate, with a heavier focus on lower-risk core investments. The pension fund targets a split of 75 percent and 25 percent between core and noncore real estate.

On a stand-alone basis, the noncore portfolio is generally in-line with its target, but the real estate portfolio is now overweight to core relative to its targeted strategic blend. This is due to a number of portfolio sales executed in the noncore portfolio in late 2021. KPERS has 34 funds in its noncore portfolio, rep