UNITED STATES - Wisconsin State Investment Board has approved two new commitments worth €42m with existing commingled fund managers.
The sum of $12.16m (€9.3m) has been allocated to the Fortress Fund II while the other $30m commitment is to the Centerline High Yield CMBS Fund III Bridge Loan.
Pension fund officials said they are confident the new commitments will generate attractive investment returns for the investor and Wisconsin has been contacted by some of its other existing commingled fund managers, though it has yet to make any final decisions on whether to also work with them again.
The pension fund is, much like many other US institutional investors, at present having to decide whether or not to invest more capital into existing commingled funds to help managers get through some debt issues.
Wisconsin's new investment in the Fortress Fund II opportunity fund is not technically new capital but a return on capital that had already been distributed to the pension fund. Wisconsin had received more than $119m as a return on capital from its original $75m commitment to the commingled fund.
Similarly, Wisconsin had originally made a $50m commitment to the CMBS Fund III so the new capital invested will assist Centerline in the deleveraging of its commingled fund.
At the same time, Wisconsin did make one change in its real estate programme at the end of 2008 by increasing its targeted asset allocation from 5% to 6%.
Like other pension funds around the country, the new allocation will not actually allow the investor to move new capital in the marketplace but instead moves the new allocation closer to what the pension fund has invested in real estate.
Wisconsin had invested 6.3% of its total plan assets in real estate by the end of 2008 so the figures currently held has increased as a result of market movements and its impact on the plan's assets elsewhere.
The value of the private equity real estate portfolio was $3.3bn at the end of last year, while the pension fund has a REIT portfolio of $63m in a domestic strategy and $167m invested in global REITs.