UNITED STATES - Arizona Public Safety Retirement System intends to make at least two more real estate commitments to commingled funds by investing through a US opportunistic strategy in 2010.
Pension fund officials say there are going to be many strong investment opportunities to take advantage of as the economy has yet to show improvements.
Arizona Public Safety recently invested in opportunistic assets as it made a $25m (€18.2m) commitment to the Alcion Real Estate Partners Master Fund II commingled fund.
A good portion of its investment strategy is to invest in out of favour property types, such as include boutique hotels and halted condominium projects, although it also allocates assets to traditional office buildings.
Arizona Public Safety expects to achieve a 20% gross IRR over a three- to seven-year holding period.
Alcion Ventures, the fund's asset manager, expects to complete its $400m equity raising by October and will then apply up to 65% leverage on its portfolio.
Arizona Public Safety is looking to invest more capital opportunistic commingled funds as the year progresses, following guidance from its real estate consultant, ORG Real Property.
The pension fund now invests 9.5% of its $6.1bn in assets under management in real estate - above its 8% targeted allocation to the asset class, although it has the option of reaching up to 12%.