Ohio Public Employees Retirement System (Ohio PERS) intends to focus on niche real estate sectors this year.
A board meeting document shows that the strategy will involve property types that are out of favour with investors in a bid to produce outsized returns.
The pension fund also expects to sell parts of its real estate portfolio in 2017 – specifically assets for which buyers are willing to pay premium prices, or those Ohio PERS would prefer not to own during a market downturn.
Ohio PERS did not disclose targets for new investments or asset sales.
Its real estate portfolio was valued at $8.26bn at of the end of November 2016, representing 10.8% of total assets.
Last year, the pension fund sought to bring its real estate exposure closer to its target allocation of 10%.
It stopped making new commitments to closed-ended funds and sold assets through its separate account managers in a bid to reduce its 11.4% real estate weighting.