Investors - MARCH 23, 2017

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University of California to increase real assets allocation

by Jody Barhanovich

The $74.4 billion University of California Regents is considering combining the real assets and real estate classes of its portfolio into a single asset allocation group, according to a board meeting document.

University of California’s current target allocation to real assets is 3 percent, while its target allocation to real estate is 7.5 percent, making a combined 10.5 percent. The target allocation to the new asset group will be increased by 2 percent to 12.5 percent from the current combined 10.5 percent. The proposed changes are set to become effective on July 1, according to the document.

As of Dec. 31, 2016, the endowment fund’s actual allocation to real estate was 5.4 percent, while its actual allocation to real assets was 2.2 percent.

Additional proposed changes to the endowment’s portfolio include reducing the investment in public equities to 30 percent from 42.5 percent; increasing private equity to 22.5 percent from 11.5 percent; and raising a

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