NORTH AMERICA – The Texas Municipal Retirement System has approved a real estate pacing plan for 2014 that calls for $600m (€436.7m) to be allocated for real estate.
This is part of $1.6bn the pension fund is planning to commit to the asset class over the next three years.
The plan would be for the same amount in 2015 and $400m in 2016.
The pension fund and its real estate consultant, ORG Portfolio Management, said in a board meeting document the capital planned for 2014 would either award mandates to existing managers or strike up new investor relationships.
ORG is to produce a suitable list of managers for Texas Municipal to consider for the new capital – the pension fund does not use a Request for Proposal concept.
The scheme is looking to invest in commingled funds for the most part.
The only exception to this over the past year has been a REIT investment in a separate account with Harrison Street Securities.
To achieve diversification, the pension fund is looking to invest capital in the three risk sectors of core, value-added and opportunistic
Texas Municipal is also looking to make its first foray into co-investments.
This could be investing with another manager in a separate account purchase of an existing property or co-investing in a commingled fund, it said.
The pension fund still has a long way to go before it reaches its 10% targeted allocation for real estate.
Through the end of September, it had a total market value and unfunded commitments in real estate of $1.3bn, or 6.4% of its $21.1bn of total plan assets.
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