University of California endowment increases real assets allocation

The University of California’s General Endowment Pool (GEP) is reorganising its real assets allocation and increasing its target exposure from 10.5% to 12.5%, according to a board meeting document.

The GEP, which did not comment, previously categorised real estate and real assets as separate asset classes. It is now combining them and will increase the allocation in July.

The changes will give the investor around $200m (€186m) of new capital to invest in real assets, based on figures that show total assets were $9.9bn at the end of 2016.

The separate real estate and real assets portfolios were valued at $543m and $213m, respectively.

The real estate portfolio represented 5.4% of total assets, below its 7.5% target allocation, while real assets represented 2.2%, below its 3% target.

The GEP, advised by Mercer Investments, has a history of investing through funds.

Real Estate is split up into three different risk sectors and the biggest, opportunistic, was valued at $199m.

The value-add and core portfolios were valued at $192m and $143m, respectively.

Around 95% of the GEP’s real estate assets are in the US and more than 40% are office buildings.

The real assets portfolio is separated into four different sections: opportunistic ($71m); infrastructure ($58m); timberland and agriculture ($35m); energy ($49m).

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