UNITED STATES - Oregon Public Employees Retirement Fund has moved its targeted allocation for real estate from 8% to 11%, giving the pension fund an extra $1.8bn (€1.3bn) of new capital to invest.
Oregon PERF decided at its board meeting on August 8 to shift the weighting of its $62bn in total assets, having invested just over 7% of its assets in real estate to date
Under the new arrangement, the pension fund will place a 30% allocation of its portfolio in core assets, along 20% in value-added, 20% in public REITs and 30% in opportunistic, according to Brad Child, senior investment officer of real estate for the pension fund.
"We chose to increase our allocation to the asset class as we have an asset liability surplus and real estate has produced some very strong returns."
To the end of June 2007, the pension fund's $4.4bn real estate portfolio has delivered a 20.18% total return, generated by a return of 16.24% from the core sector, 16.91% through value-added strategies, 28.67% in opportunistic real and 17.79% from REITs.
This new allocation of capital will be split across the four existing strategies that make up the pension fund's real estate investment program and there are no immediate plans to consider any other kinds of different investment strategies.
Oregon PERF also made two commitments to the opportunistic arena at its board meeting - a $200m commitment to Blackstone Real Partners VI, and a further $150m commitment to Rockpoint Real Estate Fund III to help achieve its targeted allocation and take advantage of continued high returns.