UNITED STATE - State Universities Retirement System of Illinois (SURS) is planning to apply conservative growth to its 6% targeted allocation to real estate.
The pension fund recently committed $100m (€72m) to the UBS Trumbull Property Fund as the strategy is deemed to be safe by officials, having previously invested $105m to it in November 2009.
Offiicals at SURS consider the fund to be low-risk as it primarily invests in established and leased US properties.
It is also viewed by many pension funds as one of the better performing open-ended core commingled funds as it was one of only two open-ended core real estate funds to have performed well enough to pay out redemption queue requests to investors. The other fund was the JP Morgan Strategy Property offering, which paid out $300m in redemptions in Q4 2009.
Officials are keen to maintain a conservative strategy as there is still uncertainty as to when the US economy will recover, and is only likely to be visible when significant job growth can be seen.
Part of the Illinois State Universities' strategy is now to withdraw from some riskier investments, including a $30m investment in the value-added RREEF America REIT III. This holding was valued at just $10m at the end of November 2009 so a redemption request has been filed, according to Daniel Allen, chief investment officer for Illinois State Universities.
"This is something that we were compelled to do, even though were not sure when we are going to get our money back."
RREEF stopped paying redemptions in 2008 and has not indicated when it will resume.
Illinois State Universities is planning to raise its real estate allocation from 2% to 6% of its $12.4bn in total assets over the next few years.