Kansas Public Employees Retirement System (PERS) has set a real estate pacing plan of up to $200m (€192m) for next year to invest in non-core funds as the pension fund rebalances its core property portfolio.
The Townsend Group, the pension fund’s real estate consultant disclosed in a meeting document that for 2023, the plan is to invest between $110m and $200m.
Part of the investment plan for the year involves taking advantage of market dislocations by acquiring existing assets.
Kansas PERS is currently rebalancing its core real estate portfolio which has recently exceeded its long-term target as a result of a decline in the pension fund’s total plan assets.
The decline in total plan assets has been driven by broad-based market declines and recording an increase in year-to-date performance for the private real estate portfolio.
As of the first half of 2022, the pension had a $3.1bn real estate portfolio, comprising 80.8% core and 19.2% non-core, this compares with the 75% core and 25% non-core set by the investment policy.
As part of the rebalancing plan, the pension fund intends to cash out and not reinvest dividends received from its open-end core real estate portfolio.
Kansas PERS also expects to fully redeem the $114.8m held in the Jamestown Premiere Property Fund and the $167.1m it has invested in the UBS Trumbull Property Fund.
The Jamestown recorded a net time-weighted return of 6.3% for one-year, -2.5% for three-year, 2.5% for five-year and 7.1% for 10-year, making the fund the worse performing fund in the pension fund’s core open-ended fund portfolio.
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