The $12.3B San Diego City Employees’ Retirement System disclosed $350M pacing plans for its private equity portfolio for fiscal year 2026.
During a recent board meeting, investment consultant Callan recommended the board deploy $140M each to advisors GCM Grosvenor and StepStone and the remaining $70M to three to four direct private equity funds. The pension fund earmarked a pacing of up to $400M annually over the next 10 years, with up to $300M in aggregate targeted for the advisors and up to $100M to direct private equity funds.
Private equity stands overweight at 10.8%, with a target allocation of 10%, which the pension fund aims to achieve by 2027.
“Commitment pacing is higher because of a higher total plan expected return and lower recent commitments as the Plan was over target,” disclosed meeting materials.
During the meeting, Jamie Hamrick, SDCERS’ senior investment officer, and Demitrios Haldes, the pension fund’s investment officer, recommended the investment committee hike its target allocation to buyouts from 70% to 80% while reducing the target allocation for special situations strategies from 10% to 30%.
The primary funds’ target allocation was hiked from 35% to a range of 40% to 60% and the allocations to secondaries/co-investments were reduced.
The pension plan allocates 50%-80% of its private equity portfolio to buyouts, 10%-30% each to growth and venture, and up to 20% to special situations.
