By Muskan Arora
The $12B Alameda County Employees Retirement Association has earmarked $325M for its real estate pacing plan for fiscal year 2025-26.
According to the pension plan’s board meeting materials, $225M has been bucketed for core real estate, owing to the fund’s underinvestment in the core space. The pension fund has also set up to $100M for its non-core investments, including equity or debt strategy “to achieve and maintain vintage year diversification as the existing fund’s return capital.”
The pension plan will also consider allocations to emerging managers, which could include investments in broadly diversified or specialized investment strategies where the manager has a competitive advantage.
As of year-end 2024, ACERA’s real estate exposure was at 6.9% against a target allocation of 8.2%, following its move to reduce the allocation from 9% that year.
“The volatile rise in interest rates is the driving force behind the slowdown in transactions,” noted Avery Robinson, senior vice-president at consultant Callan, in the meeting materials. “Overall, fundamentals are relatively stronger for apartments, industrial, grocery-anchored retail and most alternative sectors when compared to other sectors.”
In 2024, the pension plan allocated $50M to PGIM U.S. Real Estate Debt Fund, a core strategy fund; $50M to Heitman Value Partners VI Value Add and $50M to Starwood Distressed Opportunities Fund XII.
