UNITED STATES - School Employees Retirement System of Ohio has approved commitments totaling $100m (€67.2m) into two non-core commingled funds, as its investment strategy for 2008 is to ignore the core real estate market.
Ohio School agreed, at its November 16 board meeting, to invest $50m into the Fillmore West fund - a $1bn structured finance fund due to close in February - along with a further $50m into CB Richard Ellis Strategic Partners US V funds, with the assistance of its consultant Summit Strategies Group.
These actions fall in line with the pension fund's annual real estate investment plan for fiscal 2008, which will see the fund invest no capital in core commingled funds as prices for buying core properties are considered to be way too high and the cap rates on the traditional property types are now at historical low levels.
Officials say the Ohio School pension fund is investing in value-added and opportunistic strategies because there is the potential for higher returns and investment in real estate where there is less competing capital.
Ohio School Employees had a real estate portfolio valued at $1.22bn to the end of September, with its portfolio split 66% in core, 12.2% in value-added, 4.7% in opportunistic and 17.1% in public REITs.
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