School Employees Retirement System of Ohio is looking to increase its real asset portfolio in the next year.
The plan recently approved its annual investment plan, with a 12.5% allocation to real estate.
In its last fiscal year, the pension fund had made $400m (€292m) of new commitments to core real assets strategies, including infrastructure.
The commitments brought the pension fund’s real assets to 10.4% of its total plan assets as of March this year.
Ohio will reduce the amount it has invested in non-core real estate. Ohio School Employees currently has 54% of its real estate assets in the core sector which it is looking to increase to 60-70% and generate consistent income returns and partially hedge against inflation over the long term.
Non-core would be cut from its current level of 34% to as low as 25%. Ohio, which is looking to place capital in both the US and Europe, will use commingled funds.
The plan has allocated $150m to hire a new domestic REIT manager this year and is in the process of reviewing responders to its RFP and selecting finalists. A final decision will be made next month.