The State-Boston Retirement System has approved a new RFP search for open-ended commingled fund managers.
The amount of capital allocated for the search is $190m (€140m).
The RFP does not specify whether the capital will be invested in core or value-added strategies.
The proposed allocation may be invested with multiple managers.
The pension fund will be investing either with existing managers or starting up new relationships.
Boston Retirement System asks that any manager responding to the search have at a three-year track record managing an open-ended real estate product.
The proposed fund should have a gross asset value of at least $500m as of the end of 2013.
John Kelley, investment analyst for the pension fund, said: “Most of our real estate portfolio has been with commingled funds. We have a very limited history setting up separate accounts for this asset class.”
Boston Retirement System had a real estate portfolio valued at $646m, as of the end of September 2013.
This amounts to 8.7% of its $3.9bn in total plan assets.
Real Estate has a 10% long-term targeted allocation.
The deadline for applications is 4 April.
In other news, the Illinois Municipal Retirement Fund has voted to invest up to $35m into the CBRE Strategic Partners US Value Fund 7 commingled fund.
The total capital raise is projected to be in the range of $1.5bn, and there is a projected first closing for the commingled fund in April.
The anticipated net IRR returns for the limited partners in the fund are 12-13%.
The leverage component placed on the commingled fund’s portfolio is around 60%.
The fund will invest in several of the main property types, including office buildings and apartments, in the US.
Its targeted markets will include the energy markets in Houston and Dallas and the technology sector in areas such as the San Francisco Bay Area and Boston.
The pension fund is still well below its targeted allocation for real estate.
Through January of this year, it had committed 5% of its total plan assets to the asset class.
It has an 8% targeted allocation.
