The $10.5 billion San Diego City Employees’ Retirement System (SDCERS) is considering a 1 percent increase to its infrastructure allocation, according to recent board meeting documents.
The increase would bring the exposure in infrastructure from 3 percent to 4 percent of the total fund, with a focus on core investments. As infrastructure is part of the real assets portfolio, the total real assets allocation also would increase from 14 percent to 15 percent.
Upon reviewing its asset allocation and portfolio structure, SDCERS said it believes adding to its infrastructure exposure will help the pension fund hedge its inflation-sensitive liabilities and offer additional diversification benefits, while lowering overall volatility. As the plan liabilities are affected by cost-of-living adjustments, SDCERS believes it is important to have assets that can protect purchasing