NORTH AMERICA – The Employees Retirement System of Texas is planning to invest as much as $495m (€385.5m) in real estate between now and the end of its 2014 fiscal year.
The capital will be divided, with the pension fund investing as much as $150m before the end of fiscal year 2013 in two or three commitments.
The balance will be set aside for fiscal year 2014, when the scheme will make anywhere from three to 14 commitments.
Texas Employees said it wanted to focus its real estate investments on value-added and opportunistic strategies, which it said offered better risk-adjusted return opportunities than core.
The funding for fiscal year 2014 is $75m for core, $150m for value-added and $120m for opportunistic.
The pension fund said capital earmarked for core could be invested in alternative strategies – including timber and medical offices – or properties in international markets such as Europe or Asia.
It also argued that real-estate debt origination would be an investment opportunity in Europe well into 2014 and beyond.
Texas Employees also cited opportunities in high-quality, income-producing core real estate in top tier European markets.
Until now, the scheme has focused on opportunities in apartments and industrial properties in the US.
In a board meeting document, it wrote that there may be an opportunity for value-add and opportunistic with retail and office properties.
Texas Employees has a ways to get to reach its 10% targeted allocation for real estate.
As of the end of March, it has invested $1.3bn, or 5.4%, of its total plan assets in the asset class.
