UNITED STATES - Ohio Police and Fire Pension Fund has found it can only allocate $50m (€36.1bn) to real estate investing for the entire of 2009.

Ohio Police and Fire has its hands tied as to how much it could really invest in real estate as the scheme has been hit fairly hard by a fall in asset values over recent months.

The pension fund had total plan asset of $11.7bn at the end of June but this figure has dropped to $8.7bn by the end of November.

Whereas the value of the real estate portfolio has barely changed and risen to $1.03bn in November, compared with $1bn in June, a shift in the valuation of assets elsewhere in the fund has increased the actual allocation to real estate from 8.4% of the fund's assets in June to 11.8% in November.

Ohio Police and Fire established a 12% targeted allocation for real estate in August and had around $400m of capital to invest in the asset class over the next few years, but this capital has all been wiped out by the drop in value of other allocated assets.

All capital planned for real estate is invested in the ‘tactical' elements of the pension fund's portfolio - a strategy which Ohio Police and Fire identifies as offering enhanced or high return surpassing teir benchmark.

The real estate benchmark is equal to the National Property Index (NPI) plus 50 basis points net of fees over a rolling three-year period, and in excess of the NPI plus 50 basis points net of fees over a rolling five-year period.

Ohio Police and Fire will only be investing in commingled funds in 2009.

The pension fund made a move to alter its real estate strategy at its board meeting last week, assisted by The Townsend Group.