Ohio Bureau of Workers Compensation Board (OhioBWC) is planning to increase its target allocation for core and core-plus real estate from 10% to 13%.
OhioBWC, which currently has a total assets of around $26.8bn (€21.6bn), is yet to finalise the decision following a board meeting last week.
OhioBWC’s investment consultant RVK is currently reviewing the plan. A date for the final decision is yet unknown and could be sometime after the board meeting in May.
RVK said in a board meeting document that, despite a reduction in cap rates, it remains positive on real estate relative to other asset classes.
The core and core-plus allocation is intended to provide price appreciation and inflation-hedging over the long term, while generating competitive income returns versus bonds.
The investor has a core portfolio valued at $2.1bn, representing 64.82% of its total real estate portfolio. The investment managers of the portfolio include AEW, ASB, Barings, Heitman, Invesco, Morgan Stanley and UBS.
The core-plus portfolio is valued at $474m and is managed by companies including Clarion, Jamestown, PGIM, Prologis, JP Morgan and USAA.
Ohio BWC could add to its manager line-up or re-invest with some of its existing managers. There is a possibility that request for proposals could be issued to find managers to allocate the new capital to.