San Jose FCERS unveils FY 2023 pacing plan

The Californian pension has outlined its plans for investment into private real estate over the next 12 months.

Institution: San Jose Federated City Employees’ Retirement System
Headquarters: San Jose, US
AUM: $2.84 billion
Allocation to alternatives: 28.62%

San Jose Federated City Employees’ Retirement System has outlined its private markets pacing plan for fiscal year 2022-23, according to materials set to be confirmed in its upcoming investment committee meeting.

The Californian public pension has outlined $149 million for investment into private markets for FY 2022-23 – down from the $162 million pacing projection for FY 2021-22. The actual investment into private markets for FY 2021-22 will reach $167 million by 30 June.

Of this $149 million, $32 million is slated for private real estate investment. San Jose FCERS has appetite for real estate investment in both core and non-core funds across North America and Central/Eastern Europe.

Furthermore, San Jose FCERS has confirmed two commitments to private real estate vehicles made across FY 2021-22: $10 million each to Praedium X Middle-Income Housing Fund and H.I.G. Realty Partners IV.

Praedium Group launched Fund X in October 2019 and has raised $215 million for the fund through interim closes. The previous fund in the series closed on $385 million in December 2018.

HIG Realty launched their fourth opportunistic real estate vehicle in December 2019, seeking $750 million in investor capital. According to PERE data, they have raised more than $440 million for the fund.

San Jose Federated City Employees’ Retirement System currently allocates 7.76 percent of its investment portfolio to private real estate, comprising $220 million in capital.

As illustrated below, the $2.84 billion public pension’s recent private real estate commitments have tended to target vehicles with value-add or opportunistic strategies that invest in North America.

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