Illinois SURS makes big push into industrial real estate via funds

Illinois State Universities Retirement System (SURS) has sought to boost its exposure to industrial real estate by investing $150m (€135m) in funds managed by Prologis and Cabot Properties for the first time.

The $19.4bn pension fund, which has a $1.7bn real estate portfolio, has committed $100m to Prologis Targeted US Logistics Fund and $50m to Cabot Industrial Value Fund VI.

It is the first time that Illinois SURS has invested in industrial-only funds, both within its core and non-core real estate portfolios.

According to public information, the open-ended core Prologis fund has total assets under management of $12.3bn.

The closed-ended Cabot Properties fund aims to deploy 60% of its capital in stabilised assets, 25% in assets that need repositioning and 15% in developments.

According to industry sources, most US pension funds and their consultants believe that the industrial sector is now the best performing of the four main property types and should continue its strong performance for the next few years.

Earlier this month, IPE Real Assets reported that Tennessee Consolidated Retirement System had also invested in the Prologis Targeted US Logistics Fund and committed capital to another industrial-focused fund managed by Exeter Property Group.

Last week, Cambridge Associates published research that predicts that $6.4bn will be raised for industrial real estate funds in 2019, which would make it a record year with more than double the $2.9bn raised in 2018.

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