UNITED STATES - The School Employees Retirement System of Ohio plans to invest $100m (€62.9m) to $150m in real estate over the next 12 months. This is roughly the same amount that was planned for fiscal year 2008. This allocation is part of the pension fund's annual investment plan for fiscal year 2009.

This is a good example of what many pension funds are doing around the US whereby they are allocating the same or less to real estate this year relative to last year. Pension funds are doing this because of the uncertainty in the real estate markets and the denominator effect.

Ohio School Employees has two intended uses for the new capital. One is the continued expansion of its international real estate programme which wants to grow beyond western Europe. The long term plan is that international real estate should account for 15% of the overall real estate portfolio.

The other initiative for this year is to continue a shift away from core and into a value added and/or opportunistic strategies.

Ohio School Employees will consider further investments with several of its current commingled fund managers as and when they offer new funds. An allocation may be made to Beacon Capital Strategic Partners VI - an opportunity office acquisition fund - sometime during the summer.

Early next year the pension fund might also commit to Carlyle Realty Partners VI - a global opportunity fund, to CB Richard Ellis Investors which has commingled funds focusing on the UK and continental Europe as well as to Colony Investors IX which has a global investment strategy.

The amount invested in real estate could be impacted by the denominator affect. If markets turn around in the fiscal year, more capital - $160-200m - might be invested with existing managers. Typically the pension fund makes individual commitments of $40-50m.

Ohio School Employees will continue to search for new strategies or managers in real estate that might benefit the overall investment portfolio.