UNITED STATES - The Policemen's Annuity and Benefit Fund of Chicago has issued a Request for Proposal for non-core real estate managers.

The pension fund wants to see what investment options it has in the market, according to Sam Kunz, chief investment officer for the pension fund.

"We are sending out the RFP for us to get an idea of the kinds of commingled funds that are being marketed, for us to make a possible investment in the future."

Chicago Policemen could invest $25m (€18.5m) to $30m in the core search, conducted by its real estate consultant, Courtland Partners.

The investor has several requirements for managers on the RFP but the key requirements are the firm must have at least a three-year track record and the product/strategy must be a commingled fund investment vehicle.

The pension fund is keeping the timing of making a decision on the search open-ended at this time.

But Chicago Policemen's move to invest in non-core real estate will likely lead to further diversification within its commingled fund focus.  At least $110m of its assets are already invested in core commingled real estate funds, including two delivered by Prudential Real Estate Investors and UBS Realty Investors.

The pension fund's existing real estate portfolio is still well short of its targeted allocation to real estate as an the asset class as Chicago Policemen currently has around 3.5% of its $3.6bn of total plan assets in real estate.  Yet officials believe they can push the real estate portfolio to $210m - closer to its 7% targeted allocation for the asset class.

The pension fund did sell a fraction of its REIT portfolio at the end of last year because of funding issues: it sold half of a European Investments REIT portfolio worth $10m and sold $12m of a $20m portfolio at ING Clarion Real Estate Securities.