The South Carolina Retirement System has chosen CenterSquare Capital Management to be its first-ever REIT manager with an allocation of $250m (€230m).
The pension fund is planning to invest more capital in REITs in future, with a new, first-time total allocation for REITs of up to 2.5% of its total plan assets.
Based on its current $27bn total plan, the pension fund could invest as much as $675m.
CenterSquare will only be investing in US REITs, with South Carolina calling the strategy a better representation of its private real estate portfolio and policy benchmark, in comparison to a global/international REIT investment strategy.
CenterSquare will benchmark against the FTSE NAREIT Equity REIT Index.
REITs that own office, industrial, retail and apartment assets will be preferred.
The pension fund made the investment with the REIT manager after a recommendation from its consultant Aon Hewitt.
South Carolina, which will this year invest in REITs and private real estate, has moved its target allocation for private real estate from 5% to 7%.
The new allocation could consist of a mix of fund and separate-account relationships.
Investments could be either core or value-added.