UNITED STATES - Virginia Retirement System has created two new investment entities to investing in real estate debt securities.
These entities are called VAG Investors LLC and VIG Investors LLC. Both of these real estate investments were discussed at the pension fund's board meeting in June.
The pension fund looks at these investments as part of its opportunistic real estate strategy. It has not made a final decision as to how much capital will be allocated to each entity, but the sum could be around $200m (€128m).
Both of the entities will only invest in the US. The placement of capital in real estate debt securities will be the overall investment strategy.
The entities are set up as separate account relationships.
VIC Investors will be managed by ING Clarion Capital. VAC Investors will be overseen by Angelo, Gordon & Co.
These real estate commitments by Virginia are the latest example of its real estate investment strategy. The pension fund does not have a targeted real estate allocation but does have a range for real estate which is now up to 10% of its total plan assets. This strategy allows the pension fund to invest in the asset class when it sees a strong investment opportunity.
Virginia had total plan assets of $57.6bn at the end of April. Its total real estate portfolio was valued at $4.07bn at that point, equal to 7.1% of total plan assets. Its real estate securities portfolio stood at $1.22bn.