SFERS seeks consultant for shift to real assets

The $15.6 billion pension plan intends to shift its focus from real estate to real assets and is in the process of seeking a new consultant to help find such investments. SFERS also recently committed $40 million to Berkshire Property Advisors’ latest multifamily fund.

The San Francisco Employees Retirement System (SFERS) is on the hunt for a new consultant as it plans to make the switch from real estate to real assets. 

Documents from the $15.6 billion pension plan reveal that, with its contract with The Townsend Group as real estate investment consultant set to expire in June, SFERS is looking to begin the search for a real assets consultant. The SFERS board approved a motion at its May 8 meeting to issue a request for proposals (RFP) for real asset consulting services.

Potential respondents to SFERS’ RFP will have until early June to submit proposals. The SFERS staff will finalize recommendations in July or August, and a new consultant will likely be on board as early as mid-September or early October. All told, the pension system anticipates the process to take a minimum of three to four months.

One source told PERE that, even though SFERS is planning to shift its investment focus from real estate to real assets, the vast majority of the plan’s investments are expected to be in real estate for “quite some time.” 

As a result of this search for a new consultant and impending shift in investment focus, the board approved a motion to defer its annual real estate investment presentation, typically given in June, for nine months. During that time, SFERS has the authority to commit up to $300 million in real estate investment opportunities. 

Separately, SFERS approved a $40 million commitment to the Berkshire Multifamily Value Fund III at its May 8 meeting. Berkshire Property Advisors’ value-added fund, which is seeking $400 million in equity commitments, will target multifamily investment opportunities across the US. 

Last June, it was announced that SFERS planned to increase its allocation to real estate and put an added focus on opportunistic and value-added strategies, having approved a plan to allocate as much as $400 million to non-core managers for its current fiscal year, which began July 1. Since then, the pension plan has invested approximately $274 million in such non-core funds as AEW Partners VII, Harrison Street Real Estate Partners IV, TriGate Property Partners II, Brookfield Strategic Real Estate Partners and Rockpoint Real Estate Fund IV, in addition to the aforementioned Berkshire fund