UNITED STATES - Alaska Retirement Management Board has decided not to allocate any new capital to real estate investment in fiscal 2009.
The pension fund made a decision at its board meeting on 26 September not to invest any further assets in real estate over the short-term as the pension fund has a targeted 10% allocation for the asset class but the amount it has actually invested so far is 12.5%.
This additional investment over target allocation is still within the fund's broad range for real estate, which is +/- 4%, according to Steve Sikes the State investment officer working on the real estate portfolio.
"Our goal here is to stay the course and not make any new capital commitments to real estate for fiscal '09. The real estate investment market is going through some difficult times now."
The pension fund had total plan assets of $15.1bn (€11bn) to the end of August and its decision to withhold any new capital to real estate is a big change from a year ago.
The pension fund could have allocated up to $300m to the asset class in fiscal 2008 but the amount actually invested was $140m.
All of the capital at that time was invested in non-core real estate as an addition to its existing sector holdings within the real estate portfolio.
The pension fund chose to make follow-on commitments with some of its existing real estate managers and one of these was an investment into Lehman Brothers Real Estate Partners III - managed within the Neuberger Berman private equity entity now spun off as a private equity firm following the collapse of the Lehman Brothers parent group.
"We are still holding our commitment to this commingled fund," said Sikes.
"No decisions have been made to change this and we are monitoring the situation with Lehman Brothers very closely."
Its other commitments last year were made with into ING Clarion Development Ventures III, Schroders' Five Arrows Realty Securities V and an office building investment fund managed by Tishman Speyer.