UNITED STATES - Ohio Public Employees Retirement System has expanded the Reit investment program of its healthcare fund by 1% to 6%.
This will mean the pension fund has a potential $135m (€91.6m) of capital to be invested in REITs in the future.
Ohio PERS has a relatively conservative investment strategy for its $13.6bn healthcare fund but believes investing in public Reits falls in line with this strategy. The healthcare fund also has a major need for liquidity, which is why it has an allocation to public Reits rather than private real estate.
Ohio PERS made the decision to extend its public Reits allocation at its December 18 board meeting but part of the proposal was to shift the acceptable range in the portfolio for public REITs by +/- 3% to +/- 4%.
The healthcare fund now has an existing Reit portfolio valued at around $649m and its strategy is to internally-manage investments in publicly-traded companies which own or manage real estate in the United States.
Benchmark for the Reit portfolio is the Dow Jones Real Estate Securities index, which is a broad measure of the performance of publicly-traded real estate securities and includes Reits and real estate operating companies.
The healthcare fund is designed to pay for delivery of healthcare to members of the Ohio Public Employees Retirement System and spends about $1bn a year in healthcare expenses.
Ohio PERS also has a 1% allocation to Reits for its defined benefit fund, currently valued at $700m, but this allocation will remain unchanged for the foreseeable future.