Teachers’ Retirement System of Oklahoma has set a $400m (€390.3m) real estate pacing plan for 2023.
The Townsend Group, the pension fund’s real estate consultant, said in a meeting document that the plan is to make $100m worth of core investments.
Townsend is recommending that the pension targets diversified and/or sector-specific open-ended funds to help position the core portfolio to capitalise on current market trends.
For non-core, the pension fund is expected to invest $300m in total through a number of fund commitments worth between $75m to $125m.
Townsend recommends that the non-core strategy should involve the pension reducing its exposure to COVID-19-impacted property types such as retail and office and increasing the amount invested in sectors with secular tailwinds such as industrial.
As of the first half of the year, Oklahoma Teachers, industrial assets represented 18% of the pension fund’s property type, compared to 31% for the ODCE Index.
Real estate accounts for $1.7bn or 8.6% of the pension fund’s $19.7bn of total plan assets. Oklahoma Teachers has a 10% allocation target for real estate.
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