Key Takeaways
- • San Joaquin County Employees Retirement Association (CERA) has set a $200m (€182.2m) real estate pacing amount for the current year, according to a board meeting document.
- • Of the $200m, $75m will go to core open-ended funds and $125m to non-core real estate, with all non-core capital expected to be invested through funds.
- • San Joaquin CERA has no plan to invest additional capital in core real estate over the next four years, per the pacing document prepared with consultant Meketa Investment Group.
- • Core open-ended fund redemption queues have surged: according to Meketa, the NFI-ODCE Index had roughly 19.3% of net asset value in redemption requests in Q1 2024, versus a 9.2% peak in Q4 2020 and a 15% peak during the global financial crisis.
Summary
San Joaquin County Employees Retirement Association (CERA) has set a $200m (€182.2m) real estate pacing amount for 2024, according to a board meeting document reported by IPE Real Assets. The plan splits the commitment into two buckets: $75m allocated to core open-ended funds and $125m to non-core real estate strategies. All of the non-core allocation is expected to be deployed through commingled fund vehicles rather than direct investments.
The pension fund's consultant, Meketa Investment Group, disclosed in the document that San Joaquin CERA does not plan to add further capital to core real estate over the next four years. That stance comes as the core open-ended fund segment faces mounting redemption pressure from limited partners in the US. According to Meketa, the NFI-ODCE Index had approximately 19.3% of its net asset value in the redemption queue during the first quarter of 2024. That level is roughly double the 9.2% peak seen during the COVID-19 pandemic in the fourth quarter of 2020 and exceeds the 15% peak reached during the global financial crisis, when redemption requests outpaced new contributions for two consecutive years.
The elevated queue underscores the liquidity strain facing core open-ended vehicles, a dynamic that has shaped how allocators are sizing exposure between core and non-core strategies. San Joaquin CERA's decision to hold its core allocation flat while directing incremental capital toward non-core funds reflects that environment.
The pension fund's consultant, Meketa Investment Group, disclosed in the document that San Joaquin CERA does not plan to add further capital to core real estate over the next four years. That stance comes as the core open-ended fund segment faces mounting redemption pressure from limited partners in the US. According to Meketa, the NFI-ODCE Index had approximately 19.3% of its net asset value in the redemption queue during the first quarter of 2024. That level is roughly double the 9.2% peak seen during the COVID-19 pandemic in the fourth quarter of 2020 and exceeds the 15% peak reached during the global financial crisis, when redemption requests outpaced new contributions for two consecutive years.
The elevated queue underscores the liquidity strain facing core open-ended vehicles, a dynamic that has shaped how allocators are sizing exposure between core and non-core strategies. San Joaquin CERA's decision to hold its core allocation flat while directing incremental capital toward non-core funds reflects that environment.
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