UNITED STATES - San Antonio Fire and Police Pension Fund has increased its strategic asset allocation to real estate by four percentage points, giving it $95m (€71.4m) in new spending power.
The pension fund recently completed an asset allocation study and moved its target exposure to real estate from 8% to 12%.
The vast majority of the capital (74%) will be invested in high-return commingled property funds, with the balance committed to lower-risk core funds.
The pension fund is open to investing in the US real estate markets and internationally, and would consider pursuing opportunistic strategies with exposure to structured finance.
The pension fund will discuss its investment plans in greater detail at its board meeting on May 12, and possibly take some action as a result.
San Antonio Fire and Police have already invested in a variety of existing commingled funds.
These include open-ended core vehicles, but also a number of high-return and opportunistic funds, including Colony Investors III, Square Mile Partners II and Intercontinental Real Estate Investment Fund IV.
The pension fund's real estate consultant The Townsend Group has been given full investment discretion for its ongoing property investment programme.
Townsend has identified a two-step implementation plan for the pension fund's future real estate investments: a rebalance of its existing core US portfolio, followed by commitments to new funds.
The first part could potentially involve the transfer of some existing open-ended commingled fund investments into other open-ended vehicles.
There are currently four open-ended commingled fund managers in the US that no longer have redemption queues on their commingled funds: JP Morgan Asset Management, UBS Realty Investors, AMB Property Corporation and INVESCO Realty Advisors.
San Antonio Fire and Police real estate portfolio was valued at $122m at the end of September 2009.