Search
 

Pension Fund Increases CMBS Allocation

SAN FRANCISCO-The San Francisco City and County Employees' Retirement System also makes a big move to balance its portfolio, which has become overweight with core and industrial assets.

By Brian K. Miller | Updated on March 23, 2008

SAN FRANCISCO-San Francisco City and County Employees’ Retirement System this month increased its investment in CMBS through a new Fidelity fund. The pension fund also took steps to balance its portfolio, which has become overweight in core and industrial assets.

With regard to the CMBS market, the fund has committed $25 million to the Fidelity Real Estate Opportunistic Income Fund L.P. The fund will invest primarily in high yield real estate debt securities and instruments backed (directly and indirectly) by commercial property. Some of the capital will be invested in residential mortgage-backed securities and subordinated securities of real estate CDOs, according to staff and advisor memos.

The $25-million commitment will be allocated to the 5% “opportunity” segment of the SFERS Fixed Income Portfolio. Fidelity is currently one of SFERS’ two managers for high yield CMBS, managing $220 million as of the end of December for the Retirement System. A staff report says the primary difference from its existing CMBS investments is that the Fidelity Real Estate Opportunistic Income Fund provides more investment flexibility in terms of allowing investments in real estate whole loans and corporate real estate bonds as well a modest use of leverage.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.