Employees’ Retirement System of Rhode Island is to invest up to $380m (€293.4m) in real estate over the next two years.
David Glickman, managing director of Rhode Island’s consultant, Pension Consulting Alliance, said around $200m will be committed to core real estate by the pension fund over the next two years, with $180m for non-core.
Rhode Island is aiming to make 75% of its real estate portfolio core and 25% value-added. As of June, 61% was core, 18% was value-add and 21% opportunistic.
The pension fund has previously committed $75m to the JP Morgan Strategic Property Fund, $50m to PRISA and $35m to Morgan Stanley’s Prime Property Fund, all of which are core funds. It has also made $60m commitments to AEW Capital Management and Heitman.
Recent non-core commitments include $30m to the Exeter Industrial Value Fund III, $50m to GEM Realty V and $35m to the Waterton Venture Fund XII.
Rhode Island Employees has room to invest more in real estate, with a long-range target of 8%. Its real estate portfolio accounts for between 5% and 6% of its $8.2bn in total assets.
The pension fund’s current real estate portfolio is slightly underweight to retail, industrial and apartments and overweight to hotel and office assets.
Glickman said Rhode Island could invest in senior housing as well as retail, potentially through public REITs.
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