Steep declines in the stock market have caused the $15.24bn (€14bn) School Employees Retirement System of Ohio (Ohio SERS) to reach its recently increased real asset allocation target.

According to the pension fund, its real assets portfolio made up 14.7% of its total assets at the end of 2019, but volatility in public markets has automatically increased the share to 17%.

Other pension funds are thought to have been hit by the so-called ‘denominator effect’, when declines in public markets push up the share of private-market investments in portfolios.

As reported last month, Ohio SERS had only recently increased its real assets target allocation from 15% to 17%.

The pension fund had originally planned to reach this new target during the next fiscal year starting in July.

It had intended to evaluate investments with real estate fund managers and to pursue infrastructure co-investments.

The pension fund told IPE Real Assets that it expects equity markets to recover and for the real assets allocation to come down again.

“We are currently working on annual planning for fiscal year 2021, which will help us determine the amount of new commitments,” it said.

According to a board meeting document, Ohio SERS believes hotels, airports, seaports, retail and midstream energy assets will be affected by the current economic disruption.

It also said its focus on core assets should enable it withstand an economic downtown better than it did in 2008.