State of Michigan Retirement Systems’ (SMRS) $6.6bn (€5.9bn) real assets portfolio has outperformed its benchmark over a 12-month period by 300bps.
Real estate and infrastructure investments generated an 8.9% annual return at the end of March, well above the NCREIF Property Index, which the pension fund uses as its benchmark.
In a board meeting document, SMRS attributed the outperformance to its strategy to underweight retail and office assets and overweight apartments and hotels.
The pension fund benefitted from strong rental income from the latter two property types, as well as capital appreciation in its medical office and industrial warehouse portfolios.
Global infrastructure investments in North America and Europe also provided above-average returns, it said.
Over the past three months, the pension fund has made a number of investments and commitments in real estate and infrastructure.
It placed $40m into MWT Holdings, a separate account managed by Simpson Housing that invests in class-A apartments across the US.
SMRS also placed $15m into a separate account managed by Principal Real Estate Investors to renovate and re-lease an office building in Minneapolis.
The pension fund also co-invested $10m with Paladin Realty Latin America Investors V to take part in the acquisition of shares in a Brazilian office real estate investment trust.
A $4.5m commitment was made to AEW Senior Housing III, a fund that focuses on senior living and memory care assets in the US.
SMRS co-invested $13m in a water line development project in Texas alongside Ridgewood Private Equity Partners.