The San Francisco Employees’ Retirement System has rejected a proposed target of $525 million in private equity investment for 2009 in favor of a more modest target between $225 million and $325 million.
The revised investment pace, approved by the board on 9 December, was based on staff and consultant recommendations and driven by the denominator effect, executive director Clare Murphy told PEO.
The pension aims to have a private allocation of 10 percent to 18 percent with a long term target of 14 percent. As of 30 June, the pension had a real allocation of 10.5 percent, a figure which is likely far higher at present based on the performance of the equity markets over the last six months.
San Francisco Employees’ Retirement System has $12.1 billion under management as of 30 November. At the end of the 2006-2007 fiscal year, the pension managed $16.9 billion in assets.
A large number of US pensions have made adjustments resulting from the denominator effect lately. The Florida Retirement System this month increased the upper limit of its private equity allocation from 5 percent to 7 percent because the real allocation was nearing the 5 percent ceiling. The Pennsylvania State Employees’ Retirement System delayed follow-on commitments to four private equity funds this month and The Oregon Public Employees Retirement Fund intends to forgo new relationships with private equity firms in 2009.