The Idaho Endowment Fund Investment Board is investing in real estate for the first time.
The US pension fund has allocated $150m (€135.2m) to the sector, with a preference for core, open-ended funds.
The new target allocation for real estate is 5%, a result of a study by the fund’s general consultant Callan Associates in November last year.
The study was the first conducted by Idaho since 2010.
Larry Johnson, manager of investments at Idaho, said the new investment would diversify its investment portfolio.
Idaho will not conduct a public RFP search for its first real estate investment.
Investment staff at Idaho and Callan will conduct an invitation-only search, asking specific managers to present proposals.
The number of managers selected for the allocation or the timing of the search is still undecided.
Johnson said Idaho had not yet determined when the search would be initiated or how many managers would be allocated capital.
“I would think it would be more than one,” he said.
The Idaho Endowment Board, as of the end of January this year, has previously invested only in fixed income and equities.
Its $2.7bn portfolio was 30.5% invested in fixed income, 31.4% domestic large-cap equities, 14.4% international equities, 9.2% domestic equities, 8.5% global equities, 5% domestic small-cap equities and 1% cash.
