The San Diego County Employees Retirement Association (SDCERA) manages retirement assets for employees of San Diego County and certain other participating agencies. With approximately $16 billion in assets under management as of mid-2024, SDCERA serves over 45,000 active members, retirees, and beneficiaries.
Investment Strategy
SDCERA maintains a diversified investment portfolio designed to meet its long-term actuarial return targets. The asset allocation spans public equities, fixed income, real estate, private equity, and other alternatives. The board of retirement sets strategic allocation policies based on asset-liability studies and consultant guidance.
Public equities represent the largest portfolio component, with allocations to domestic and international markets. Fixed income provides stability and cash flow for benefit payments. SDCERA has developed a structured alternatives program that enhances return potential while maintaining appropriate risk controls.
Private Markets Approach
SDCERA’s private markets program includes allocations to private equity and real estate. The private equity portfolio spans buyout and growth equity strategies, with the system building relationships with established managers and maintaining diversification across vintage years and sub-strategies.
Real estate investments include core, value-add, and opportunistic strategies across property types. The system invests through commingled funds, selecting managers with strong operational track records and institutional-quality governance.
As a mid-sized pension fund, SDCERA values managers who provide institutional-quality service regardless of commitment size. The system expects direct access to senior investment professionals, regular and transparent performance reporting, and strong alignment of interests through meaningful GP commitments.
The investment staff conducts due diligence alongside external consultants, with the board of retirement providing governance oversight. Evaluation criteria include investment performance, team quality and stability, process discipline, operational infrastructure, and fee reasonableness. SDCERA has been thoughtful about portfolio construction, seeking to balance established manager relationships with selective exposure to newer strategies that complement the existing portfolio.
Frequently Asked Questions
What is the size of SDCERA's private equity allocation?
SDCERA allocates approximately 8-10% of total assets to private equity, representing roughly $1.3-1.6 billion in committed capital. The system invests across buyout and growth strategies with a focus on diversification and consistent net returns.
What commitment sizes does SDCERA typically make?
SDCERA typically makes commitments in the $15 million to $50 million range per fund. The system seeks managers who provide appropriate attention to mid-sized institutional investors and offer transparent reporting and direct access to senior professionals.
How does SDCERA evaluate fund managers?
SDCERA's internal investment staff works with external consultants to source and evaluate managers. The board of retirement approves new commitments. Due diligence covers performance attribution, team stability, process discipline, operational infrastructure, and fee structures. Managers should engage through consultant networks or direct outreach.
