Investment Strategy
The Kern County Employees’ Retirement Association manages approximately $6 billion in retirement assets for employees and retirees of Kern County and participating special districts in California’s Central Valley. Operating under the County Employees Retirement Law of 1937, KCERA provides defined benefit retirement, disability, and survivor benefits to its membership.
KCERA’s investment approach is centered on a diversified strategic asset allocation designed to achieve long-term returns that support the system’s benefit obligations and funded status. The portfolio is spread across global public equities, fixed income, private equity, real estate, and other diversifying strategies. The Board of Retirement reviews the strategic allocation periodically with input from investment staff and external consultants, adjusting targets based on evolving capital market conditions and the system’s liability profile.
The fund’s investment philosophy prioritizes diversification, risk management, and cost efficiency. KCERA maintains a long-term investment horizon consistent with the perpetual nature of its obligations to current and future retirees. Annual financial reports and quarterly performance updates are published on the KCERA website, providing transparency into the system’s investment program.
Private Markets Approach
KCERA’s alternatives program represents approximately 18% of the total portfolio and includes allocations to private equity and real estate. The private equity program invests across buyout, growth equity, and diversified strategies through commingled fund commitments. Typical commitment sizes range from $25 million to $75 million, reflecting the system’s overall size and diversification objectives.
The system has built a portfolio of GP relationships that balances established institutional managers with mid-market specialists. KCERA evaluates new fund opportunities based on track record, team quality and stability, strategy differentiation, and alignment with the system’s overall portfolio construction goals. Fee structure and terms are important considerations given the fund’s focus on cost-efficient implementation.
Real estate investments provide exposure to diversified property types and U.S. geographic markets through commingled funds. The program targets a mix of core income-producing properties and value-add strategies that offer both stable cash flows and appreciation potential. Real estate serves as both a return-enhancing and inflation-hedging component within the broader portfolio.
KCERA’s investment decisions are made through a structured process involving internal staff review, external consultant evaluation, and Board of Retirement approval. The system’s moderate size means it is well-positioned for mid-market fund offerings where commitments of $25-75 million represent meaningful LP relationships.
Prospective fund managers should review KCERA’s publicly available investment policy statement and recent board materials to understand current allocation targets and evaluation criteria. The system’s Central Valley location does not limit its investment reach, as KCERA invests nationally and globally across all asset classes.
Frequently Asked Questions
What is KCERA?
The Kern County Employees' Retirement Association provides defined benefit retirement, disability, and survivor benefits to employees and retirees of Kern County and participating special districts in California. KCERA manages approximately $6 billion in assets and operates under the County Employees Retirement Law of 1937. The system serves thousands of active and retired members across county government departments.
How does KCERA invest in private markets?
KCERA allocates approximately 18% of its portfolio to alternatives including private equity and real estate. The private equity program invests across buyout, growth, and diversified strategies through commingled fund commitments, with typical commitment sizes in the $25-75 million range. The system has built a diversified portfolio of GP relationships focused on consistent performance and prudent risk management.
Who oversees KCERA's investments?
KCERA is governed by a Board of Retirement that sets investment policy and strategic asset allocation. The board works with internal staff and external investment consultants to select and monitor managers across all asset classes. Board meetings are open to the public, and financial reports are published annually on the KCERA website.
