Kansas Public Employees Retirement System plans to invest up to $245m (€209m) in real estate next year, as it rebalances its portfolio in favour of core investments.
According to a board meeting document, its real estate consultant, The Townsend Group, has advised the pension fund to invest up to $125m in core real estate and between $80m and $120m in non-core assets.
Kansas PERS has increased its target weighting to core real estate from 65% to 75%. Townsend has recommended that Kansas PERS makes additional investments in core funds to help reach the new target.
Townsend said the change was made due to the reduced availability of distressed assets and the desire to conserve some “dry powder” to be invested following an eventual downturn.
Since 2012, the pension fund has made $650m worth of commitments to six core open-ended property funds: Pramerica Real Estate Investors fund, JP Morgan Strategic Property Fund, Morgan Stanley Prime Property Fund, Heitman America Real Estate Trust, UBS Trumbull Property Fund and Jamestown Premiere Property Fund.
New investments in non-core real estate are designed to provide diversification by vintage year, with flexibility to make tactical adjustments based on market conditions. The actual commitment amounts could be adjusted based on opportunities and evolving market conditions.
In recent years, all real estate investments made by Kansas PERS have been made through funds targeting US markets.
Kansas PERS also approved a $60m commitment into the LaSalle Property Fund, a follow-on commitment to a $100m allocation made to the fund in 2010.
- American Investors
- Heitman America Real Estate Trust
- Investment Strategies
- Investment Vehicles
- J.P. Morgan Strategic Property Fund
- Jamestown Premiere Property Fund
- Kansas Public Employees Retirement System
- Morgan Stanley Prime Property Fund
- Open-ended funds
- Pension Funds
- Real Estate
- UBS Trumbull Property Fund
- US Investors