UNITED STATES – Tennessee Consolidated Retirement System has sent out a questionnaire as part of a tender that could see it hire additional real estate managers.
Tendering for the first time in five years, the fund said it was seeking to identify potential new advisors and determine which existing advisors desired to renew their contracts. New and reappointed advisers would be awarded five-year contracts.
Tennessee said it would be cooperating with its real estate consultant, The Townsend Group, and that responses would be due by 1 September with a final adviser selection to be made by 1 November at the latest.
The fund said no more than 10 advisors would be appointed and that only companies registered with the Securities and Exchange Commission would be considered. They should also have a minimum of 10 years of institutional real estate experience for their senior team members, a minimum of $1bn (€750m) private real estate investments under management and be willing to manage an account with the pension fund retaining investment discretion.
It added that the tendered capital would be available to all appointed managers, with no fixed allocation determined in advance.
The segregated accounts should seek to invest in low-risk, unleveraged real estate in the US, with assets such as well-leased offices, retail, industrial and multifamily properties included in the strategy. Non-traditional property, such as student housing, will also be considered.
Tennessee said the strategy could account for 80-100% of the pension fund's total real estate portfolio.
The fund is nevertheless continuing to expand its real estate portfolio, as its investment committee on 20 August approved the beginning of the due diligence procedure to acquire an apartment complex in in Arizona.
The pension fund has a real estate portfolio valued at $1.8bn as of the end of March, representing around 5% of its $38.2bn of plan assets. It has a current allocation of no more than 10% to real estate and a current target of 7%.