Texas ERS to increase allocation to real estate and infrastructure

Employees Retirement System (ERS) of Texas is planning to increase its real estate and infrastructure allocations.

The US pension fund will increase its real estate target weighting from 10% to 11% and raise its infrastructure target from 4% to 6%, according to a board meeting document.

The news comes during the same week that IPE Real Estate reported on a similar move by another US institutional investor, the New Mexico State Investment Council, which increased its real estate allocation from 10% to 12%.

The changes by Texas ERS are the result of an asset allocation study conducted by investment consultant Aon Hewett.

The pension fund’s actual allocation to real estate is currently 9%, or $2.42bn of its total assets, which stood at $26.9bn in May 2017. It has 2% of its assets invested in infrastructure.

Texas ERS expects to focus on value-added real estate investments in the near future. Most of its activity is likely to be confined to its domestic property market, although it favours core and opportunistic strategies in Asia.

In infrastructure, the pension fund has been focused on mid-market and value-added assets on a global basis through funds, co-investments and direct investments.

Types of infrastructure include power and utilities, transportation, communications and energy.

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