Pension board approves initial allocation to Cohen & Steers tactical real estate fund
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Summary
The General Employees Pension Board approved an initial allocation to Cohen & Steers' Tactical Real Estate Fund (TReF), using proceeds from liquidating Schwab US real estate holdings. The blended 65% private/35% public strategy and fee terms (20% founder discount, 1.15% ongoing fee) were discussed at length.
The General Employees Pension Board voted to begin initial placements into Cohen & Steers' Tactical Real Estate Fund, a blended private-and-public real estate strategy, and to use proceeds from the planned liquidation of the city's Schwab U.S. real estate holdings to fund the initial allocation. The motion was made and approved by voice vote.
Mitchell Brennan of Burgess Chambers presented the recommendation and introduced a Cohen & Steers representative who described TReF as a “tactical real estate fund” that blends private property exposure with publicly traded REITs to increase liquidity and offer exposure to next-generation sectors such as data centers and health care. “TReF ... is really just a wonderful strategy to take advantage of that lead lag relationship,” the Cohen & Steers speaker said, describing a target split of about 65% private real estate and 35% public REIT exposure.
Trustees asked detailed questions about fee structure, liquidity and the initial funding source. Cohen & Steers said they were offering a 20% founder's fee discount to Burgess Chambers clients for the first year and that the ongoing management fee would be about 1.15%. They also said TReF is designed to be substantially more liquid than a comparable ODCE-style core fund—“15x quicker to get your money out of the strategy,” the presenter said—because 35% of the strategy is traded like stocks.
Burgess Chambers recommended starting with a modest initial allocation and using cash returned from the liquidation of the city's USQ/core private real estate and an existing Schwab US REIT position (the Schwab holding was cited at about $600,000, with Mitchell noting it may be closer to $625,000) as seed funding. The board moved and seconded the recommendation and approved it by voice vote; the Burgess representative said the contract will be finalized and trades executed after contract approval.
The decision follows presentations earlier in the meeting from the plan's consultants and managers reviewing 2025 performance and positioning for 2026. Board members did not record individual roll-call votes in the transcript; the action was recorded as passing on a voice vote. The board directed staff to proceed with contract approvals and to submit trade directions after the contract is finalized.
Next steps: staff will complete contract approval, then Burgess Chambers and Cohen & Steers will receive formal letters of direction and execute initial trades as funds become available from the listed sources.
