The Teachers’ Retirement System of Oklahoma is diversifying its portfolio by establishing a 3% initial allocation to infrastructure assets and reducing its target allocation to real estate from 10% to 8%, according to the pension fund’s meeting document.
The $24bn pension fund’s consultant AON said the proposed new allocation is intended to help enhance diversification across new and existing asset classes while maintaining the portfolio’s risk profile.
The 3% infrastructure allocation will be split two-thirds to open-ended funds and one-third to closed-end funds.
The open-ended fund allocation will target a 65% core, 25% value-add and 10% opportunistic investment mix. The closed-end fund strategy will target a 50% value-add, 35% opportunistic and 15% private equity mix.
The pension fund’s real estate portfolio, currently valued at $1.6bn, represents 6.97% of its total plan assets.
The current 10% real estate allocation will be reduced by 2 percentage points, with a 1 percentage point decrease in both open-ended and closed-ended real estate investments.
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