UNITED STATES - Ohio Public Employees Retirement System will be shifting some of its investment capital in real estate to an opportunistic strategy in a bid to tap the little investment likely to surface over coming months.
Officials agreed at the pension fund's board meeting last week there could be some good investment plays available in the opportunity sector over the coming months if they wait patiently.
Ohio PERS has noted there are few opportunities at this time though it is keeping a close eye on deals and sales in commingled funds and the new offerings pipeline to determine if and when opportunities will occur.
The $76bn (€59.3bn) pension fund believes the US real estate are still going through a correction so its strategy at this time is to set up an investment plan now and be ready to strike when the time is right.
Ohio PERS is seeing difficulties with its existing portfolio as several of its real estate managers - Bryanston Retail Partners, Colony Capital, CB Richard Ellis Investors and Tricon Capital Group - have reported writedowns on its commingled funds and the pension fund thinks further writedowns on its portfolio are possible.
The actual amount to be invested in the opportunistic strategy has yet to be determined but will be discussed at the pension fund's 12 November board meeting as part of 2009 investment plan.
"Our investment strategy here will be accomplished by investing capital through both commingled funds and separate accounts," said Brad Sturm, portfolio manager for Ohio PERS.
One offshoot of this would be to use separate accounts or joint ventures which officials believe present a clear competitive advantage, and investments thought to be eyed at present include the AMB Property Corporation in the logistics arena and Developers Diversified Realty Corporation in the retail sector.
Ohio PER' defined benefit fund had a real estate portfolio valued at $5.5bn to the end of June 2008 and amounted to 7.2% of its total assets.