UNITED STATES - Ohio Public Employees Retirement System has allocated an extra $160m (€128m) for US apartment and hotel investment strategies as it redeploys capital from core real estate strategies.

The pension fund has provided follow-on capital for two existing separate account mandates, with $60m for its US apartment development programme managed by Sarofim Realty Advisors and $100m for its value-add hotel strategy managed by RockBridge Capital.

The move comes after Ohio PERS withdrew $300m from the UBS Trumbull Property Fund, with the pension fund potentially considering redeeming capital from another core vehicle, the JP Morgan Strategic Property Fund.

Ohio PERS said it wanted to sell stabilised core investments and use the capital for more value-added and opportunistic investments. The pension fund's strategy contrasts with a number of institutional investors queuing up to invest core open-ended real estate funds in the US, including the UBS Trumbull and JP Morgan Strategic funds. San Diego, for example, has recently allocated $30m to the latter.

In February 2011, Ohio PERS awarded Sarofim a $125m mandate to develop apartments in US markets where population and employment growth was expected to continue. With the new capital, the real estate manager will continue to have full investment discretion on the ground that it stays within the agreed strategy.

Ohio PERS considers the strategy to form part of its opportunistic property exposure.

The new commitment to RockBridge is the second time the pension fund has backed the hotel investment specialist, having established $125m mandate in June 2011.

RockBridge has a history of investing in three and four-storey hotels across the major markets in the US.

According to recent figures, Ohio PERS is close to its target real estate allocation of 10%, having reached 9.2% in April 2012.

 

Topics