Florida State Board of Administration is considering an increase to its current 10% allocation for real estate.
Florida SBA disclosed in a meeting document that its real estate portfolio – which represented 8.7% of the pension fund’s $199bn (€179.5bn) portfolio as at the end of the third quarter of last year – had risen to 10.2% in March this year as the pension fund’s total assets grew to $206bn.
The real estate portfolio increased mainly due to strong returns from the asset class and the volatility of Florida SBA’s global equities portfolio, the pension fund said.
The process whereby sharp falls in stock markets push up investors’ weightings to non-listed markets like private real estate is referred to as the denominator effect.
Florida SBA told IPE Real Assets that it intends to discuss increasing its real estate allocation at its board meetings in future.
The pension fund expects to target industrial/cold storage, residential, medical office buildings, self-storage, life science and retail/mixed-use assets through fund and separate account relationships.
Florida SBA said it also intends to sell some office and retail assets as part of a portfolio construction strategy.
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