Oregon Public Employees Retirement Fund (PERF) is researching the diversification benefits of investing in core real estate on a global basis.

According to a board meeting report, the research will be a priority for 2019.

Anthony Breault, senior real estate investment officer for the Oregon State Treasury, told IPE Real Assets: “We would like to be able to bring the results of the research to our board at this time next year to see about if it makes sense to move ahead with this strategy.”

It could mean the pension fund will invest through in core real estate outside the US through separate accounts or open-ended funds at some point in the future.

“We need to determine how attractive the economies are in international markets compared to where the economy is in the US,” Breault said.

In the meantime, Oregon PERF plans to invest between $800m (€706bn) and $1.3bn in US real estate. It will focus on core and core-plus investments, rather than higher-return strategies.

“It’s our belief that the best risk-adjusted returns are in the core/core-plus and light value-add sectors of the marketplace,” Breault said.

“It’s very difficult to find transaction in the opportunistic sector that can produce returns that exceed the ODCE Index by 300bps.

“The best way to accomplish this is with higher leverage, which is not east to do in today’s lending environment.”

Oregon PERF is more interested in industrial and apartment assets than offices.