The State of Wisconsin Investment Board (SWIB) is increasing its target allocation for real estate from 7% to 8%, the US pension fund told IPE Real Estate.
The new allocation will allow the pension fund to invest another $1bn (€956.8m) in the asset class.
The action was taken on the recommendation of investment consultant NEPC and was the final outcome of an asset allocation review.
A portion of the additional investment will be funded by cutting allocations to public equities and public fixed income, according to a board-meeting document.
SWIB has a current real estate portfolio valued at $6.254bn, as of the end of October.
The pension fund’s existing investment policy allows for an allocation range between 5% and 11% for real estate.
SWIB has invested in open-ended and closed-end funds, joint ventures, co-investments and separate accounts.
Core, value and opportunistic opportunities will be considered by the fund, which is looking to grow its international real estate portfolio.
SWIB aims to make investments in a diversified portfolio, in some cases buying into funds that invest capital in multiple property types.
For single assets, the fund could invest in the industrial, office, retail and apartment sectors.
The pension fund also has a history of investing in more specialised property types such as medical office buildings, student housing and hotels.