The Idaho Endowment Fund Investment Board has selected UBS and Deutsche Bank as asset managers as it makes its first foray into real estate.
The US pension fund allocated $75m (€66m) to the UBS Trumbull Property Income Fund and the same amount again to the Deutsche Bank RREEF America II.
As reported earlier this year, Idaho has a preference for core, open-ended funds.
The UBS Property Income Fund, a US debt fund, provides new debt on core office, industrial, retail and apartment assets.
Total assets in the fund, which has an 8-9% target return, are in excess of $2bn.
RREEF America II mostly acquires US office, industrial, retail and apartments.
Idaho’s 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.
Chris Halvorson, investment officer at Idaho, said: “Both of these investments will give us some strong diversification benefits.
“Prior to making these commitments, our investment portfolio was 70% equities, 30% fixed income. The commitments we made will get us to the 5% targeted allocation we established for real estate earlier this year.”
He said the two managers had “very conservative” investment strategies, “which we were comfortable with”.
Not all of the capital will be called by the managers immediately, he said.
“The entry-queue situation was not a big deal for us,” he added, “as we were not planning to have all the capital called at once.”
Idaho, which did not use a traditional RFP approach, also considered Morgan Stanley’s Prime Property Fund.
