GLOBAL - The Employees Retirement System of Texas has selected Urdang Real Estate Securities to run a quarter of its $465m (€351.7m) REIT portfolio.

The other three finalists for the search were Cohen & Steers Capital Management, European Investors and Forum Securities.

Texas Employees had previously managed the REIT portfolio in-house using a passive investment strategy, but Urdang will now manage the portfolio using an active strategy.

The pension fund's REIT portfolio as a whole employs a global investment strategy, which will remain unchanged.

As at the end of August, the portfolio returned 7.2% for the current quarter, 15.45% for one year and 9.4% for three years.

Texas Employees is still looking to make a $50m commitment to a manager for an emerging managers strategy that would be invested in the US.

The pension fund said it was also looking to invest in private real estate next year, most likely using commingled funds.

Texas Employees said it expected to make its first private real estate investment overseas over the next 12 months.

The pension fund is proposing real estate investments totalling $550m during fiscal year 2011, with $225m each in core and value-added and $100m in opportunistic.