Illinois SURS plans major real assets push over the next five years

State Universities Retirement System (SURS) of Illinois is planning to make up to $2.2bn (€1.93bn) worth of real assets investments over the next five years.

In a board meeting document, the $19bn pension fund said it intends to set aside $450m over the next three years for stabilised growth and core investments and between $250m and $350m a year for the next five years for non-traditional growth/non-core.

The pacing plan was prepared by investment consultant Callan.

The pension fund’s real assets portfolio comprises real estate, infrastructure, farmland and timber.

Most of the capital will be invested in funds.

Illinois SURS recently approved an additional $30m commitment to Dune Real Estate Fund IV – a value-add fund that has asked investors for an extension to secure more capital – have initially committed $20m in December 2017.

Fund IV has a $1.25bn target and a $1.5bn hard cap.

The fund will target mostly US properties including residential, retail and industrial assets with execteds return of 15%-17% net and 18%-22% gross. The leverage on the fund can be as much as 75%.

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