The University of Texas Investment Management Company (UTIMCO) is planning to allocate $450m (€395m) to real estate.
According to a board meeting document from the investor, UTIMCO has a potential capital deployment for the asset class of $450m for its 2016-17 fiscal year.
The capital is part of up to $1.95bn that could be placed in real estate over the next four years.
Most of the capital will be invested in the US, although the investor will consider some selective exposure to Europe and Latin America.
UTIMCO will look to structure partnerships with real estate managers where it will have more control as to how and when capital is deployed.
It will target niche strategies, including the wireless spectrum, manufactured housing, parking garages and data centres.
The investor believes such property types are less correlated with the overall real estate market.
UTIMCO will be looking to place some capital into traditional property types.
The investor is of the opinion that grocery-anchored/urban retail and Class B multi-family properties are still attractive at this point in the market cycle.
UTIMCO has a history of investing capital in core and non-core real estate.
Its current real estate portfolio has a total net asset value of $1.5bn, according to a board meeting document.
Core assets total $1.36bn, or 90% of the portfolio, with the other $152m, or 10%, in non-core.
UTIMCO’s existing real estate portfolio has produced a one-year invested return of 17.8%, outperforming its benchmark, the Cambridge Total Real Estate index, by more than 600 basis points.
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