Virginia to ups its real estate potential

UNITED STATES - Virginia Retirement System has approved a policy to increase its real estate allocation from 7% to 10%.

This means the pension fund could invest another $1.75bn (€1.15bn) into real estate in the future if Virginia  believes there are investment opportunities in the marketplace place it deems attractive.

The pension fund does not have a specific targeted allocation for real estate but instead sets a limit to be invested if there are investments it likes.

The pension fund prefers to have its real estate program set this way as it will then only place capital into the asset class if there are opportunities to be had.

One such example towards the end of 2007 was a $100m commitment to the Guggenheim Structured Real Estate Fund III - a structured finance fund which Virginia felt made sense given all the changes that had occurred in the debt markets since the summer of 2007.

Virginia does already have a sizeable existing real estate portfolio, as to the end of 2007, the pension fund had invested $3.3bn in real estate, amounting to 5.6% of its $58.7bn in total plan assets.