Real estate was the top performing asset class for Maryland State Retirement and Pension System (SRPS), posting an 11.6% annual return.

Private equity came in second at 9.94%, according to a pension fund document that showed investment returns for the 12 months leading up to 30 June 2016.

The real estate allocation, however, underperformed its benchmark by 163bps.

The benchmark is blended, with 85% comprising the NCREIF ODCE Index and 15% in the FTSE EPRA/NAREIT Developed Net Index.

It typically invests in private real estate funds and public real estate investment trusts (REITs) through separate accounts.

The real estate porfolio is valued at $3.74bn (€3.34bn), representing 8.2% of the pension fund’s total assets.

Maryland SRPS would need to invest $760m to reach its target allocation of 10%.

The pension fund will work with its investment consultant Pension Consulting Alliance to invest new calital into asset class.

Real estate forms part of the pension fund’s real assets portfolio. It has 2% invested in natural resources and infrastructure.