REAL ESTATE – The £26bn (€38.5bn) Universities Superannuation Scheme, the pension fund for university staff, has made a move to increase it central European real estate holdings.
First Property Group, which manages regional real estate for the fund, said that since June “it had been contracted to acquire an additional €13m in Central Europe, primarily on behalf of the fund managed for the Universities Superannuation Scheme”.
In August 2005 the property asset management business won a €74.3m mandate from USS to invest in property in the UK and Central Europe. First Property’s assets under management now exceed £75m.
USS invests 10% of its assets in property. Some 80% of its assets are allocated in equities, an exposure that was much debated earlier this year.
In a Statement of Investment Principles published in July 2006 the fund stated that “the target for investment in alternative assets is 5% of the total fund by 2008 and is to be accommodated within the 80% allocation to equities.”
Property is not counted among alternative assets. The fund is looking at private equity, commodities, currencies, absolute return strategies, derivatives and infrastructure.
“The management committee also believes that alternative investments, i.e. those investments which are not traditional fixed interest, property or mainstream quoted equities, can provide similar returns to equities whilst diversifying the sources of excess return (over fixed interest securities).”
The rest of the USS portfolio is invested in fixed interest (10%).
Earlier this month it emerged that USS was looking to hire two responsible investment staff as a result of “re-organisation and expansion”.