Ohio Bureau of Workers Compensation (BWC) is planning to resume its real estate portfolio rebalancing, real estate investment consultant RVK disclosed in the life company’s meeting document.
Ohio BWC initially suspended its real estate portfolio rebalancing in 2022 as the amount it has invested in real estate peaked in at 23% as the asset class significantly outperformed public equity and bond markets.
To help lower the amount invested in real estate, Ohio BWC decided to pause any new commitments to new value-add real estate funds and it elected to receive and not reinvest any dividends that it received from the existing core and core-plus funds in its portfolio.
In the years that followed, real estate has recorded negative returns while stocks and bonds have mostly recovered. Higher interest rates, leading to increased borrowing costs and lower property valuations, have been a key contributor to this negative price appreciation across the market.
As a result, Ohio BWC’s real estate portfolio has naturally rebalanced, with its current allocation at 18%, below the upper policy limit of 20%.
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