NORTH AMERICA – The School Employees Retirement System of Ohio has approved a $100m (€73.6m) follow-on commitment into the RREEF America REIT II commingled fund. 

This allocation represents the first commitment the pension fund has made for real estate this year.

Ohio School Employees made a $70m allocation to the fund in October 2004. 

This investment has a current value of $75.6m, as of the end of June.

The pension fund said it was pleased with the performance of the fund and that the new commitment would be drawn down immediately. 

The gross returns on the fund are 2.5% for three months, 11.9% for one year and 16.5% for three years.

Deutsche Asset & Wealth Management is the manager of RREEF America II, an open-ended core fund that invests in the US. 

Ohio School Employees has more than $1.2bn in real estate assets, representing 9.9% of the $11.6bn of total plan assets. 

The targeted allocation is 12%.

In other news, the Public Employees Retirement Association of New Mexico has decided to take $50m out of its REIT portfolio and move it into private real estate.

It said the strong performance of the REIT portfolio had pushed the sector above the upper range limit set in the pension fund's real estate investment policy.

The value of the REIT portfolio is $231m, as of the end of August, making up 54.7% of the $422m real estate portfolio. 

The investment target for REITs is 25%, with an upper limit of 40%.

Public Employees of New Mexico will withdraw $35m from LaSalle Investment Management and $15m from Morgan Stanley Real Estate.

In a board-meeting document, the pension fund said that drawing money from these two managers in those amounts would maintain the general diversification and balance of the REIT portfolio, but equally weight the two active managers in the portfolio and slightly re-orientate the allocation towards non-US markets.

The capital taken out will be placed in cash and used to fund future capital calls for private real estate commitments.

New Mexico is looking at a second liquidation on the REIT portfolios managed by LaSalle and Morgan Stanley during the second quarter of 2014, according to a pension fund document. 

The actual amount has not been determined at this time. 

This will depend on how much or how little capital the private real estate partnerships draw down between now and the second quarter of next year.

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