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San Francisco pension ups RE allocation to 12%

The San Francisco Employees’ Retirement System is joining a growing number of public pensions which have increased their real estate and private equity targets in recent months.

The $16-billion (€10 billion) San Francisco Employees’ Retirement System has increased its target allocations to real estate to 12 percent from 10 percent and from 12 percent to 14 percent for private equity, according to media reports. The pension was not immediately available for comment.

The new allocation was approved at a board meeting last week. International equity also increased three percentage points to 23 percent while domestic equity decreased from 28 percent to 26 percent and fixed income fell from 30 to 25 percent.

The system’s board also approved new commitments to private equity funds including $40 million to First Reserve Fund XII, which invests in energy companies, and $40 million to Five Arrows Realty Securities V fund, which invests in securities of real estate companies.

LPs have been increasing their allocations to alternatives including real estate in recent months. Earlier this month, Maryland’s $38 billion State Retirement and Pension System committed $175 million to real estate and private equity funds, including $100 million to Rockwood Capital’s latest US vehicle, Rockwood Capital Real Estate Partners VIII, $50 million to Great Hill Equity Partners IV and $25 million to Longitude Venture Partners. The pension recently doubled its real estate allocation from five to 10 percent and also increased its private equity allocation from two percent to five percent.