Public pension plans in the US have been some of the biggest allocators to real estate and infrastructure strategies. Jon Peterson and Richard Lowe profile six of the largest 

paul mouchakkaa


Total assets: $326bn
Real estate: $30.5bn
Infrastructure: $3.8bn
Managing investment director: Paul Mouchakkaa

In recent years, the California Public Employees Retirement System (CalPERS) has rebalanced its real estate portfolio so that 75% of its investments are in core and income-producing assets, predominantly in the office, industrial, retail and apartment sectors. 

Most of the capital is invested through separate accounts. For example, it recently committed an extra $1.2bn (€0.96bn) to Fifth Street Properties, a partnership managed by CommonWealth Partners that invests in office buildings in the US. It has also committed $700m to multi-family strategy managed by General Investment & Development.

But the country’s biggest public pension fund also provides big tickets for real estate funds. Most recently it committed $750m to Blackstone’s European core-plus real estate fund, Blackstone Property Partners Europe.

CalPERS has significantly increased its exposure to infrastructure, which rose from $2.6bn to $3.8bn in 12 months by the end of June last year. The pension fund has employed a global strategy, split 56% domestic and 44% international. It is investing with eight external infrastructure managers through three separate accounts, eight funds and three direct investments. Most of its capital is invested in power and transportation infrastructure, with some in energy, water and communications.

Towards the end of last year CalPERS acquired an 80% stake in Rocky Caney Holdings, the owner of two wind farms in US. The seller, Enel Green Power North America, will retain the remaining 20% and will continue to manage and operate farms. CalPERS made the investment through the Gulf Pacific Power account, an existing partnership between CalPERS and Harbert Management Corporation.

mike di re


Total assets: $225bn
Real estate: $26.6bn
Infrastructure: $1.75bn
Director of real estate: Mike DiRe

The California State Teachers Retirement System (CalSTRS) had a busy 2017 for real estate investments, and is just below its 13% target allocation at 11.8%, based on most recent figures. One of the most notable was a $500m (€400m) vehicle set up to co-invest alongside Blackstone’s core-plus and opportunistic real estate funds.

It was also one of the first US pension funds to resume development of for-sale homes since the global financial crisis. 

The $225bn pension fund committed $204m to GTIS Partners to invest in home building and residential lots across the US. Some of the largest public pension funds were active home builders prior to 2008. 

In recent years, CalSTRS has been an active home builder in California, and is planning to expand its activities beyond its home state.

The fund recently replaced its real estate consultant, The Townsend Group, after nine years, appointing RCLCO. It also began exploring the merits of increasing its investments in real estate operating companies, as it looks for new strategies to generate returns. 

A board report said it was considering increasing its “handful of positions where we own real estate operating companies”. 

It warned that it “will require more staff time” and will be challenging to replicate the strategy on an international basis.

It also looked into changing the parameters of its core real estate allocation to include non-stabilised assets. The pension fund wants to introduce a sub-category to its core real estate portfolio called “transitional core”. Such assets are expected to become core over time as CalSTRS improves them physically or through new leasings.

CalSTRS invests in infrastructure through core, value-add, opportunistic and public-listed strategies, targeting energy, transportation, ports, water/waste and communications.

It has invested in US infrastructure alongside Dutch pension fund APG and Argo Infrastructure Partners through its Infrastructure Alliance Partnership.

us pension funds

stephen spook

Florida SBA 

Total assets: $211bn
Real estate: $14.2bn
Infrastructure: $570m
Senior investment officer for real estate: Stephen Spook

Florida State Board of Administration (SBA) invests in a mixture of core, value-add and opportunistic real estate through commingled funds, joint ventures and separate accounts. It recently committed $125m (€100m) to a Nordic-focused real estate fund managed by CapMan, and $75m to Heitman ’s latest US value-added strategy.

It has also been rebalancing its portfolio by pulling some capital out of open-ended core funds in the US. Last year it redeemed $124m from PGIM Real Estate ’s PRISA II fund, $100m from the UBS Trumbull Property Fund and $50m from the JP Morgan Strategic Property Fund.

At the same time, it committed capital to two new core funds. The biggest example was its $200m investment in Carlyle Property Investors, the first-ever open-ended, core property fund launched by the private equity group. It also committed $100m to Carlyle’s latest opportunistic fund, Carlyle Realty Partners VIII.

Additionally, Florida SBA has invested $50m in Prologis Targeted US Logistics Fund, a large, open-ended vehicle created by the consolidation of two industrial portfolios managed by Prologis.

It also made a large individual acquisition through a separate account managed by MetLife, acquiring the Orchard Commons office campus in San Jose for $105m.

Florida SBA invests in infrastructure globally through commingled fund commitments. In the final quarter of 2017 it invested in two energy funds – EnCap Flatrock Midstream Fund IV and Post Oak Energy IV.

eric lang

Texas Teachers 

Total assets: $146bn
Real estate: $17.5bn
Infrastructure: $5.7bn*
Senior managing director of external private markets:  Eric Lang

The Teacher Retirement System of Texas (Texas Teachers) has been very active in the real estate markets during the past 12 months. 

The $17.5bn (€14bn) most recently provided cornerstone capital to Madison International Realty’s new core real estate fund. It has committed $200m to Madison International Prime Property Investor Series 1, which will acquire stakes in office, retail, industrial, and residential assets in the US. Madison International hopes to raise between $600m and $1bn for the fund.

The pension fund also committed $200m to a special-situations strategy managed by Square Mile Capital. During 2017, it committed to real estate funds including CBRE Global Investors’ latest European value-added fund, AEW ’s latest Asian fund, Divco West’s largest-ever US fund, and a core US fund managed by Invesco Real Estate.

It has created separate accounts and co-investment vehicles, including a $400m entity to co-invest alongside Blackstone in US opportunistic deals. It also set up a single-investor fund with Greystar to invest $300m in US apartments, and a €50m ‘sidecar’ to invest alongside Tristan Capital Partners’ latest European opportunity fund. It is providing $100m of co-investment capital for AEW’s US senior housing fund.

Texas Teachers also invests in infrastructure and natural resources globally through commingled funds. The largest commitment issued in 2017 was a $250m investment in the Carlyle Global Infrastructure Opportunity Fund in September. 

It is also participating in EQT Partners’ third global infrastructure fund, for which the fund manager hopes to raise $4bn from investors.

* includes energy and natural resources

david gillan


Total Assets: $121bn
Real estate: $20.5bn
Infrastructure : $0
Managing director of real estate:  David Gillan

The New York State Teachers Retirement System (NYSTRS) invests in real estate through separate accounts, commingled funds, debt strategies and public REITs. It made several significant investments in 2017, including a $200m (€160m) commitment to Blackstone Real Estate Partners Asia II. It also hired CBRE Global Investors to run a new separate account to invest in core-plus real estate in the US.

The $121bn pension fund has changed its real estate portfolio, reshuffling its REIT manager line-up. It hired AEW Capital Management and Heitman as new REIT managers and awarded them $210m each. 

It also awarded the same amount in new capital to its REIT managers, Brookfield Investment Management and Dimensional Fund Advisors. Most of this capital was sourced portfolios that had been managed by LaSalle Investment Management and Deutsche Bank.

NYSTRS reduced its target allocation for real estate debt from 8% to 7%, but was still able to invest $200m in Grosvenor Capital Management Debt 2018, a vehicle that will place debt with emerging real estate managers in the US.

Other fund investments include $100m in Northwood Real Estate Partners Series VIII, which will invest opportunistically in the US and Europe, and a $100m commitment to Penwood Select Industrial Partners V, which is targeting industrial markets in Southern California, New York and New Jersey.

NYSTRS also allocated $75m to Abacus Multi-family Partners IV, which focuses on converting value-add apartments into grade-A residential assets, avoiding major markets like San Francisco and New York City. It also invested $75m in Artemis Real Estate Partners Fund III, and $50m in Green Oak US Fund III. Both funds pursue opportunistic strategies across the US.

theresa whitmarsh


Total assets:  $104bn
Real estate: $16.2bn
Infrastructure: $1.49bn
Executive director: Theresa Whitmarsh 

Washington State Investment Board (WSIB) typically invests in real estate through single-investor partnerships with investment managers. Most of its strategy is in non-core real estate. A recent example, in April 2017, involved an $850m (€682m) commitment with Zocalo Special Situations to invest in real estate debt.

The $16.2bn pension fund has a more diverse strategy for infrastructure. It can invest in commingled funds or make co-investments domestically and globally. 

It recently committed $250m to ISQ Global Infrastructure Fund II, managed by I Squared Capital. The fund will invest mainly in North America and Europe, but also in countries in Asia and Latin America, and will buy assets worth between $300m and $1bn each. It is the second time WSIB has invested with I Squared Capital. In 2015, the pension fund co-invested $200m with the fund manager in hydro power.

In November 2017 it committed $600m to Stonepeak Infrastructure Fund III, and invested $150m in Stonepeak Evergreen Investment Partners, a vehicle set up to co-invest alongside the main fund.

Last year, WSIB become the lead investor in a renewable-energy infrastructure fund, committing $300m. Geronimo Energy hopes to raise $1bn for Geronimo Renewable Infrastructure Partners, 

WSIB, which manages investments for several retirement plans and public funds, is looking to commit $300m to Geronimo Renewable Infrastructure Partners.

The manager of the fund, Geronimo Energy, did not comment on its fundraising ambitions, but WSIB said it was looking to raise $1bn for the fund, to invest in wind and solar assets in North America, with an emphasis on the US.