Oregon Public Employees Retirement Fund is close to concluding its programme to invest between $800m and $900m (€764m) in core open-ended property funds.
In its board meeting report, the pension fund said it will commit $150m each into ASB Allegiance Real Estate Fund and Heitman America Real Estate Trust.
The move follows two earlier commitments – $300m to the JP Morgan Strategic Property Fund made in 2016 and $250m to the Morgan Stanley Prime Property Fund made this year – and concludes its plans to increase its core exposure.
The latest investments will provide exposure to alternative sectors, inlcluding senior housing, student acommodation, self-storage and data centres.
Anthony Breault, senior investment officer for real estate for the Oregon Investment Council, told IPE Real Assets: “We were looking to achieve diversification with our core open-ended fund managers.
“With the last two hires, we were looking to find managers that had some exposure to alternative property types within the core open-ended fund space.”
Breault added: “Those property types are able to produce sustainability of income which is what core real estate is all about.”
The entry queue for the Heitman fund is now close to $1bn, while the entry queue for ASB’s fund is much smaller.
“During our due diligence of these commingled funds, we became aware of their entry queues. We are looking at both of these investments on a long-term basis,” Breault said.
Oregon is now looking too invest in core-plus funds next year.
The pension fund still has room for additional investments before it reaches its 12.5% real estate target allocation. At the end of October, it had invested $7.5bn – or 10% of total assets – in real estate.
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