Mass PRIM to take real estate separate accounts into global markets

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Massachusetts Pension Reserves Investment Management Board (Mass PRIM) is looking to broaden its core real estate strategy to include international markets.

The $66.9bn (€53.7bn) pension fund, which invests in core real estate through six separate accounts, will for the first time consider investments outside the US in 2018, according to its latest board meeting report.

This year, Mass PRIM plans to commit $920m to the separate accounts, four of which are managed by Invesco Real Estate, LaSalle Investment Management, AEW and JP Morgan Asset Management.

A fifth is managed internally by Mass PRIM’s in-house investment team, and a sixth is being managed provisionally by AEW. The pension fund is searching for an additional manager to take over the latter.

At the end of June 2017, the six separate accounts were valued at more than $5bn, making up the majority of Mass PRIM’s $6 real estate portfolio, which also includes investments in funds and listed real estate investment trusts.

Mass PRIM said it expects its separate account managers to sell assets this year. It has projected disposals to reach $583m in total, including sales from commingled funds managed by DivcoWest and The Carlyle Group.

The pension fund is also looking to increase its infrastructure exposure, and is close to making a $214m investment in New Zealand timberland.

Campbell Global, investing on behalf of Mass PRIM, is under contact to acquire a 191,347 acre portfolio, the fifth largest plantation in New Zealand.

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