7 Reasons Why CalPERS May Have Increased Its Exposure to Real Estate

SACRAMENTO, CA—Last week the California Public Employees’ Retirement System revealed it had decided to divest its entire allocation in hedge funds. The reason, it said, was not due to performance issues but rather one of scale: their $4 billion allocation in the asset class was not large enough to provide cost-effective diversification.

At the same time the fund has increased its allocation in a number of commercial real estate investments: it is adding $400 million to an existing partnership with Invesco Real Estate and $200 million to an existing partnership with Pacific Urban Residential. Another $600 million went to a real estate partnership with Bentall Kennedy and $700 million to two real estate partnerships with GI Partners.