Colorado Public Employees’ Retirement Association is considering increasing its target allocation to real estate from 7% to 8.5%.

The move, related to the $45.3bn (€60.7bn) pension fund’s three-yearly allocation review, could release $700m to be invested in the asset class.

The asset allocation study is being carried out by Aon Hewitt Investment Consulting.

The decision will be made at Colorado PERA’s board meeting on March 20.

Colorado PERA is just above its current real estate allocation at 7.1%.

Colorado PERA’s real estate portfolio was valued at $3.2bn at the end of 2014, the majority of which comprises core and value-added investments.

The extra 1.5% of real estate exposure could be funded by selling some the pension fund’s long-duration bond holdings.

Should the pension fund go ahead with the change, Aon Hewitt will work with pension fund over subsequent months to devise a new investment plan.

The pension fund has a history of investing in real estate through a variety of structures including commingled funds and separate accounts.

It has employed a combination of core, value-add and opportunistic strategies.