UNITED STATES - North Dakota State Investment Board has decided to move a portion of its capital originally invested in core real estate and move it into the value-added real estate bucket.
Steve Cochrane, executive director of the pension fund, said it had $150m invested in the INVESCO core real fund but has now decided to move around one-third of this capital from the commingled fund into the firm's value-added fund.
North Dakota State's $4.1bn (€3bn) pension fund already has a real estate allocation of
8%, which is now fully invested.
"Moving this capital around will give us the opportunity to produce higher returns and allow us to invest in a different kind of real estate," said Cochrane.
While the core real estate Fund buys existing and leased office, industrial, retail and apartments in major metropolitan markets across the United States, this latest project has a wider remit to buy properties needing to be leased up, repositioned or expanded anhd some capital is being committed to buy properties before construction starts.
All of the four main property types will be considered for the seven-year Real II fund, to generate 10-14% leveraged IRR, after fees have been paid - around 200 basis points higher than most core real estate investments.