Connecticut Retirement Plans and Trust Funds (CRPTF) is planning to invest around $200m (€163m) a year in non-core real estate for the next several years.
The Townsend Group, the pension fund’s real estate consultant, said the investment will help reach the 7% real estate target set in 2016.
Townsend stated in a board meeting report that CRPTF is currently over-allocated to core assets and underweight value-add and opportunistic strategies.
As at September last year, core assets accounted for 59.5% of the real estate portfolio, compared with the policy target of 50%.
The value-add sector was 19.1% versus the 25% target and the opportunistic accounted for 21.4% compared with the 25% target.
CRPTF, which invests in real estate through US and global funds, wants to invest in value-add opportunities that can yield a 7% net return. The expected net return for opportunistic is 10%.
