SetFocus is also use per-tick updates for tracking. Though not sure about network solution, it still should work with manual rotation.
You can use SetFocus along with lerping target location if you want to (just update the focus per tick), but probably it will be heavier than setting manual rotation.
Another workaround is to make an invisible Actor for targeting, call SetFocus to this actor just once, and update it’s location smoothly as you want to.