The School Employees Retirement System of Ohio has nearly doubled the size of its REIT portfolio by allocating $100m (€84.6m) to BlackRock for a new relationship.
The capital will be invested in a passive REIT strategy, with the pension fund choosing the strategy as a way to improve the risk/return characteristics of its real assets portfolio.
Ohio School, which has had REIT exposure for nearly 20 years through various managers, mandates and allocations, had an existing REIT portfolio worth $160m prior to the agreement with BlackRock.
The manager, which will only be investing in US REITs, will benchmark against the MSCI US REIT Index and aim to match or exceed the returns generated from private real estate.
The selection of BlackRock as a new REIT manager is part of $450m of new capital invested in real estate by Ohio School Employees.
A new $200m commitment to CBRE Global Investors’ US Core Partners fund, alongside two $75m commitments to Mesa West Capital’s Core Lending Fund and Almanac Realty’s VII fund, were also made by Ohio School.
The pension fund said CBRE had a strong portfolio construction process for the fund, which will invest in office, industrial, retail and apartment properties.
Mesa West Capital is using its Corew Lending Fund to invest in first mortgages on core US property, with investors projected to achieve a 7-8% net IRR.
The fund has a maximum 35% loan-to-value ratio.
Almanac Realty is looking for a $1bn capital raise for its Realty Securities VII and typically places no leverage on its funds.
The fund provides growth capital for real estate companies with a focus on US real estate.