UNITED STATES – Kansas Public Employees Retirement System has retained one investment manager and replaced two others as part of a renewing of its listed real estate strategy.
The pension fund has retained Brookfield Investment Management, parted ways with Duff & Phelps Investment Management and Principal Real Estate Investors, and hired Urdang Capital Management.
The pension fund stated that Duff & Phelps and Principal were dropped due to relative performance and the restructuring of the REIT portfolio.
The $137m (€106m) in capital that will be managed by Brookfield and Urdang will come from Kansas PERS's newly created 'yield-driven' investment allocation.
This represents close to 20% to the overall yield-driven portfolio, which has been valued at $686m, and also includes fixed income investments.
Kansas PERS stated that the new investment category would target higher yields than the broad equity and debt markets with a significant component of return expected to come from income. Yield-driven investments are expected to generate similar returns to US equities but with lower volatility.
Brookfield and Urdang will take over the management of the pension fund's existing REIT portfolio and will be benchmarked against the MSCI US REIT Index.
Kansas PERS has also decided to increase its holding in the UBS Trumbull Property Fund.
The pension fund already has an $82.1m stake in the core open-ended fund and is looking to commit up to a further $80m.
This capital will come from a total of $150m that the pension fund is planning to invest in core open-ended real estate funds.