The University of Texas Investment Management Company (UTIMCO) has increased its allocations to real estate and infrastructure this year, but has already experienced value declines in the first three months.

The endowment had earmarked $1bn for new real estate investments this year and $400m for infrastructure, having upped its allocation targets from 8% to 10% and from 2% to 4%, respectively.

But its $2.9bn real estate porfolio had dropped in value by 8% at the end of March, and the endowment is anticipating value declines of 6% to 9% in its $1bn infrastructure portfolio.

The value declines in the real estate portfolio were mainly attributed to its 28% weighting to retail and leisure/travel assets.

Around half of UTIMCO’s infrastructure portfolio comprises power, midstream energy and transportation assets, which it said had been most affected by the COVID-19 pandemic.

To accomodate its new allocation to real estate and infrastructure, UTIMCO is reducing emerging-markets equities from 10% to 8%, directional hedge funds from 12% to 5% and fixed income from 9.5% to 7%.

To read the digital edition of the latest IPE Real Assets magazine click here. 

Topics