UNITED STATES - Kansas Public Employees Retirement System has made its first ever investment in infrastructure with a $50m (€35.2m) commitment into the Brookfield Americas Infrastructure Fund.
Pension fund officials say this kind of investment will allow the investor to achieve additional diversification for its overall investment portfolio.
Brookfield Asset Management is in the early stages of raising capital between $1bn-$1.5bn for the commingled fund, which can then be placed infrastructure projects in North and South America.
More specifically, targeted markets for investment are expected to be the US, Canada and Mexico in North America along with Brazil, Chile, Columbia and Peru in South America.
Some real estate consultants believe the South American component to the Brookfield fund will distinguish itself from other infrastructure commingled funds as most other funds in this sector tend to invest in North America, Europe or Australia.
Kansas PERS has placed this new commitment within its real assets investment category, alongside investments in timber and energy.
Similarly, the pension fund may make further investments in infrastructure in the future, though there is no decision at this stage as to whether it will do so on a domestic or global basis.
This allocation to infrastructure will take up 30% of the pension fund's 14% total holding in the ‘real asset' category.
At this time, the fund's real asset category has investments valued at $1.4bn while the pension fund's total plan assets amount to $10bn.
Kansas PERS recently made other decisions related to its real estate area as it selected three firms to manage the pension fund's existing internally-managed REIT portfolio: Principal Real Estate Investors, Dulf & Phelps Investment Management and Brookfield Redding.
Kansas PERS valued its internal REIT portfolio at $105m at the end of March and chose to hire outside managers to look after its REIT portfolio so if could free up its investment staff for other responsibilities.
Kansas PERS had run the REIT portfolio through a passive index fund while the new managers will use an active strategy. All of the assets in the REIT portfolio are companies that own and operate assets in the United States.