REAL ESTATE - The $70.4bn (€54.4bn) Wisconsin State Investment Board is to look at placing some capital into the marketplace this year with a non-core investment strategy.
These will be done in a mixture of strategies on both the commingled fund and separate account sides of the business.
Wisconsin does have room to invest capital in real estate. The pension fund invests in real estate through its fixed trust fund.
As of March 31 this year, the fund had invested 4% of its total assets in real estate. Its targeted allocation for the asset class is 5%. The current value of its real estate portfolio is $2.8 billion.
The commingled fund activity will be done in two areas. One part of this will be to selectively consider investing in some opportunity funds. The pension fund defines opportunity funds as investment funds that try to find assets that are in distress, may need repositioning or are held by an owner that has mismanaged the property.
Wisconsin will also be evaluating opportunities in emerging markets and infrastructure fund investments. Emerging markets are targeting real estate opportunities in markets like China, India, Russia and Brazil. Commingled funds focusing on infrastructure would include investing in toll roads.
The pension fund will take a look at investing in niche property types on the separate account side. It calls niche properties as those that are not office, industrial, retail and apartments. Wisconsin will consider investment managers who focus on the non-core property types or very specific sub-markets or strategies.
The pension real estate business has established some property types as non-core or niche. These would include senior housing, medical office buildings, self-storage and manufactured housing.
Wisconsin has been active the first half of this year in the purchase of some properties on a direct basis. Both of the transactions did not include any involvement with a real estate manager.
The pension fund has made a $100m equity investment in a joint venture with Archstone. This capital will be used to acquire apartment complexes across the country. There are no assets in the venture now.
Wisconsin has acquired a portfolio of light industrial buildings from Cabot Properties for $80m.
