State of Wisconsin Investment Board (SWIB) is proposing an increase to its real estate allocation as part of a plan to lift the pension fund’s private markets allocation in favour of its public markets portfolio.

The $166bn (€170.5bn) pension fund’s investment consultant NEPC recommends that the pension fund approve the proposal to lift the real estate allocation from 7% to 8% at a meeting in December.

As part of an overall proposal to increase allocation for private markets, SWIB is also considering lifting private equity/debt from 12% to 15%.

The new allocations would be funded by reducing the pension fund’s public equity allocation to 48% from 52%.

According to NEPC, during public market downturns, private markets have an expected return advantage over public markets, leading to faster portfolio growth over time.

NEPC is also proposing a rebalance range for SWIB’s real estate of 4% to 12%.

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