The Teachers’ Retirement System of Louisiana has created a 2% allocation to invest in REITs.
The $16.9bn (€15.7bn) pension fund will be conducting a manager search next year to invest some of the capital.
Maurice Coleman, deputy CIO for the pension fund, said: “We have not decided on the size of our REIT search yet.”
Neither has the number of managers to be hired been determined, he said.
Louisiana Teachers’ search will be brought to the pension fund board for approval at its June 2017 board meeting, and a final decision on the mandate will be made on 8 September.
The pension fund has also approved two $50m commitments to Harbert US Real Estate Fund VI and Crow Holdings Realty Partners VIII.
Harbert is looking to acquire mid-sized existing US properties.
Its typical equity investment per transaction is $10m-30m, a size deemed small for “mega funds” and too large for individual investors.
Office, multifamily, retail and industrial assets are being considered for the fund.
Leverage is not projected to exceed 70%.
Harbert has either acquired or is in the process of acquiring 11 assets for Fund VI totalling $509.5m, as stated in a pension fund board-meeting document.
One of the pending deals is the $50.5m purchase of 3 Hutton Center office building in Orange County.
Fund VI is making a $19.95m equity investment in the deal.
Crow Holdings is targeting a $1bn capital raise for Partners VIII, according to a Louisiana Teachers board-meeting document.
Leverage on the fund is limited to a maximum of 65% loan-to-cost at the portfolio level.
The fund will invest in the US, with a particular focus on Southern assets in the office, industrial, retail and apartment sectors.
Specialised assets such as self-storage and student housing will be considered.
All of the capital will be invested in value-add properties.
