NORTH AMERICA – The Massachusetts Pension Reserves Investment Management Board is planning to re-invest $1bn (€750m) of proceeds it received on new real estate debt it placed in its core portfolio.
Tim Schlitzer, senior investment officer for real estate and timber at Mass PRIM, said: "We are planning to invest this capital over the next couple of years with our existing core separate account managers in new investments."
The pension fund completed its debt placement on its core portfolio on 14 February, doubling the amount of debt from 15% and to 30%.
"It was our opinion that we wanted to take advantage of the inexpensive debt that is now available in the marketplace," Schlitzer said.
Mass PRIM will invest the proceeds through its five existing separate account core managers – JP Morgan Asset Management, TA Associates Realty, INVESCO Real Estate, LaSalle Investment Management and AEW Capital Management.
The way the capital is deployed will depend on the manager, the scheme said.
In some cases, it will be handed out on a deal-by-deal basis. In other cases, some managers will be awarded a specific allocation.
Mass PRIM will focus the capital on the four main property types of office, industrial, retail and apartments, across the US.
In a board meeting document, the pension fund said overseeing the deployment of the debt proceeds would be its main investment theme this year.
It will also continue to evaluate non-core transactions through existing managers or other strategic partners, and monitor new non-core investments.
Mass PRIM has a core real estate portfolio valued at $3.6bn, as at the end of 2012.
Its total real estate portfolio is $5bn, or 9.7% of total plan assets.
The targeted allocation for real estate is 10%.
