Investors - MAY 11, 2016

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San Diego City considers exit from REITs

by Zoë Wolff

The $10.6 billion San Diego City Employees’ Retirement System is planning to no longer invest in REITs, according to an investment committee meeting agenda for May 12.

The pension fund’s investment consultant, Aon Hewitt, wrote in the board meeting document that, “real estate securities suffer from higher volatility, more recently due to factors beyond underlying real estate fundamentals.”

It added that although the pension fund’s real estate portfolio has performed well over the long term, it could be enhanced by removing REIT exposure and transitioning real estate assets from the opportunity fund to the real estate portfolio.

Currently, REITs represent 11.4 percent of SDCERS’s real estate portfolio.

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