September 15, 2017
In the last two years, CalPERS’ real estate allocations have dropped by 50%. While that shift mirrors an overall trend by U.S. public pension plans, it comes at a time when annual deployment in the asset class has also tumbled, according to research from Chicago-based FPL Advisory Group.
CalPERS plans to invest roughly $3.95 billion during its fiscal year that began July 1. That’s a big drop from the planned investment of $4.6 billion in the 2016-17 fiscal year, and $7.9 billion in the 2015-16 fiscal year.
The giant pension system has only deployed $1.6 billion out of the $4.6 billion approved for 2016-17. And, both its targeted and actual deployment in the asset class were significantly lower from the 2015-16 fiscal year, when $2.9 billion out of an approved $7.9 billion was actually invested.
The challenge facing all real estate investors is as prices move up, it becomes an increasingly tighter and more competitive situation.
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