UNITED STATES - Chicago Policemen's Annuity and Benefit Fund has increased its allocation to real estate from 5% to 7%.
John Gallagher, executive director of the pension fund, said the additional capital to be invested in real estate is $80m, on the recommendation of the pension fund's general consultant, Ennis Knupp & Associates.
"With think that the real estate as an asset class will deliver higher returns than equities and can give the pension fund more diversification," said Gallagher.
Chicago Policemen will be working on the real estate strategy with its real estate consultant, Courtland Partners but the pension fund will be making its allocation through commingled funds.
All levels of risk are being considered and assets could be place in either US or international real estate funds of differing strategies, so all four major property types will be reviewed, along with offerings with a specialist investment strategy.
That said, the pension fund still has a way to go before it reaches its new target for real estate, as it has so far only invested 2.5% of its $4bn of total assets in real estate, and therefore is expected take several years to reach its new target.
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