UNITED STATES - School Employees Retirement System of Ohio is in the process of issuing redemption queues on the RREEF America REIT II and BlackRock Strategic Apartment funds.
The pension fund decided at its October board meeting to issue redemption queues worth $20m (€15.65m) in each open-ended commingled fund as officials want to get out of some core real estate and instead place this capital in value-added and opportunistic strategies.
Ohio School Employees is not the only investor pulling out of RREEF America II as the fund had seen redemption queues worth $1.6bn by the end of the third quarter - the largest amount of redemption queues for the sector.
RREEF's investment strategy is to invest mainly in existing and well-occupied office, industrial, retail and apartments across the US.
Ohio School Employees is one of the first pension funds to file a redemption queue for BlackRock's Strategic Apartment fund - a specialty commingled fund only investing in high-quality and stabilised US apartments.
This is not the first redemption queue made by Ohio School Employees as it issued two in 2007 worth $50m each to the Lion Property Fund managed by ING Clarion Partners and the UBS Trumbull Property Fund, run by UBS Realty Investors.
The pension is now looking at making follow-on commitments into four commingled funds with its existing managers CB Richard Ellis Investors UK and Europe, Carlyle Realty Partners VI and Colony Investors IX.
The total amount to be invested in these funds would be around $150m and commitments could be approved as early as the first quarter of 2009.
Ohio School Employees is also considering new investment strategies which could include infrastructure, sustainability and real estate derivatives.
According to pension fund officials, these are the most talked about areas for investing by the real estate industry now but its initial focus will be on infrastructure.
Ohio School Employees has a real estate portfolio valued at $1.2bn at the end of September, representing 13% of the plan's $9.6bn in assets under management. The fund's targeted allocation to real estate is 10%.
