Texas Municipal allocates $700m to REIT, infrastructure managers

The Texas Municipal Retirement System has allocated $700m to two REIT and infrastructure managers.

The US pension fund has made equal $350m (€320m) allocations to Nuveen Asset Management and Cohen & Steers Capital Management.

Both managers are new and will invest in REITs and infrastructure on a global basis as the pension fund diversifies its investments.

Nuveen focuses on investments backed by tangible, long-term assets with consistent cashflow streams due to long-term contracts.

Investments can be equity, debt and preferred equity.

The pension fund said Nuveen’s strategy was attractive given its contractual income orientation and its avoidance of global, inflation-linked bonds.

Cohen & Steers focuses on asset allocation and bottom-up security selection as a way to outperform markets in periods when stocks and bonds are underperforming historical averages. 

The pension fund’s decision comes after its investment board approved the move in July to double the allocation for the real return asset class from 5% to 10%.

As of October of this year, the pension fund had invested $967m, or 4.1% of its total plan assets, in a real return strategy.

Capital was invested in global inflation-linked bonds through its manager Colchester.