Texas Municipal Retirement System (TMRS) plans to issue real estate and fixed income redemptions worth over $1bn (€926.7m) by the end of 2024.
David Hunter, the pension fund’s CIO, disclosed in a meeting document that TMRS is planning to redeem the capital to help improve returns, reduce portfolio complexity and fees, and maintain the portfolio’s target allocation.
TMRS declined a request to disclose the amount it intended to redeem from its real estate investments.
Real estate accounts for $4.8bn or 13.7% of the pension fund’s $35.3bn total plan assets. TMRS has a 12% target allocation for real estate of 12% with a policy range of 7% to 17%.
The pension fund’s current investments in open-ended property funds include a $391m investment held in BentallGreenOak US Core Plus Fund, a fund which achieved a 22.39% internal rate of return, according to a pension fund board meeting document.
TMRS holds $530.7m in Invesco US Income Fund, a fund with a 13.53% internal rate of return, and also holds $368.5m in Harrison Street Core Property Fund which has an internal rate of return of 9.09%.
The pension fund has an investment in the Smart Markets Fund managed by Stockbridge valued at $570m with an 11.23% internal rate of return.
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