San Diego County Pension Returns 11.3% in Fiscal 2024

The San Diego County Employees Retirement Association, a $17.7 billion pension which serves 49,000 active, retired and former public employees of San Diego County, announced at its Thursday board meeting that the pension achieved an 11.3% return in fiscal 2024 and a 1.5% return in the second quarter of calendar 2024.

SDCERA’s investment consultant, Aon, noted at the board meeting that strong short-term returns were generated by the Magnificent Seven group of technology stocks. The 2024 returns were slightly below the fund’s policy benchmarks of 11.8% and 1.6%, respectively.

Over the past three, five, 10 and 20 years, SDCERA returned a net annualized 3.4%, 6.9%, 6.3% and 6.7%, respectively, showing mixed results in comparison with the policy benchmark for the periods of 3.0%, 7.3%, 6.4% and 6.7%, respectively.

As of June 30, the fund had an allocation of 26.2% to U.S. equities, 22.6% to risk-reducing fixed income, 12.2% to international equities, 8% to return-seeking fixed income, 7.3% to each of global equities and real estate, 6.6% to opportunistic assets, 4.9% to emerging market equities, 2.1% to private equity, 1.6% to private real assets and 1.0% to private debt.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news. 

At the fund’s Thursday board meeting, the SDCERA board approved a $75 million commitment to Sycamore Tree Capital Partners CLO Fund II. Sycamore, founded in 2020, manages $2.5 billion in assets, with $2.3 billion across senior loan assets and private commingled funds.

Mark Okada, co-founder and CEO of Sycamore, originated the first actively managed collateralized loan obligation in 1996 at Highland Capital.

“I am one of the first institutional investors in the bank loan and CLO space; by definition, because we did the first CLO, I have the most experience in the CLO space of anyone in the market,” Okada said at the Thursday board meeting.

The fund will invest in the equity and junior mezzanine tranches of Sycamore Tree-related collateralized loan obligations. SDCERA’s only other CLO allocation is an Oaktree CLO fund.

“The CLO equity space is one we think we can earn returns of 15% to 20% per year prudently,” said Tom Williams, SDCERA’s deputy CIO, at the board meeting.