The $109bn (€96.1bn) Ohio Public Employees Retirement System (PERS) has set up a 1% allocation target for its Defined Benefit Fund to invest in real estate investment trusts (REITs).

The pension fund said in a meeting document that it is lowering its emerging markets debt portfolio allocation from 5% to 4% to help fund the new REIT allocation.

According to an Ohio PERS spokesperson, the pension fund’s Defined Benefit Fund remains underweight in the overall real estate targeted allocation of 10%.

“While it’s not a perfect match, the 1% REIT allocation will assist in helping to moderate this underweight to private real estate.

“We have been reducing our emerging-market debt allocations in both our DB Fund and Health Care Fund over the past could of years because of that strategy’s volatility and historic poor returns,” the spokesperson told IPE Real Assets.

The new REIT allocation, which will be overseen in house, will be invested on a passive basis.

Ohio PERS already invests in REITs for its Health Care Fund.

Ohio PERS mulls adding infrastructure to portfolio

Ohio PERS, which currently holds no infrastructure assets, said it is planning to evaluate investing in the asset class as part of its 2022 annual investment plan.

The plan is to research infrastructure as a way to achieve return enhancing and risk diversifying assets, the pension fund said.

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