UNITED STATES - Virginia Retirement System has made a $300m (€188.5m) commitment to the investment entity Security Capital Income Opportunity Investors, LLC.
The pension fund decided at its April 10th board meeting, assisted by its real estate consultant, The Townsend Group, to invest in public REITs through preferred securities.
This is a domestic-only investment strategy as officials say pension funds in the United States think now is a good time to be investing in local public REITs because many are now trading at below their net asset value.
Virginia setup this investment as a separate account relationship with Chicago-based Security Capital Research & Management to invest in a variety of public REITs whichi n turn invest in the four main property types.
Virginia is projecting its return on Income Opportunity Investors will be 8%.
This kind of investment is the preferred route of this pension fund when investing in real estate as it does not have a targeted allocation for the asset class but invests capital in the asset class if it sees is an attractive opportunity.
Virginia had total plan assets of $56.4bn at April 9 this year.