UNITED STATES - Maryland State Retirement Agency is planning on conducting a full review of its entire real estate portfolio which is expected to last well into its 2010 fiscal year starting on 1 July.

One of the ideas being considered is the shifting of the pension fund out of direct ownership through separate accounts, according to Mansco Perry, chief investment officer for Maryland State.

"It's my belief that our pension fund is just not large enough to achieve the right level of diversification for separate account relationships," said Perry.

The pension fund now directly owns a total of nine properties on a separate account basis so there is a chance that some of these properties will be sold as a result of the real estate portfolio review being conducted with the assistance of PCA Real Estate.

Perry has been the main driver behind this review as he has wanted to take a hard look at the fund's real estate assets - now holds a real estate portfolio valued at a little less than $2bn (€1.52bn) - since his arrival in April last year.

Maryland remains one of the few pension funds in the United States to hold a real estate component below its targeted allocation as it has invested 7% of its total plan assets in real estate against a targeted allocation of 10% for the asset class.

Should the fund choose to move assets out of direct property holdings, it is likely monies will be invested in commingled funds and REITs.