UNITED STATES - Wisconsin State Investment Board has made a $27.5m (€18.8m) investment in the Core Plus Real Estate Fund Q, which is structured by the pension fund as a convertible preferred equity investment.

According to Wisconsin officials, the commingled fund of funds investment will produce attractive risk-adjusted returns, which are projected to return 100 basis points over the NCREIF Property Index.

This investment is said to complement the pension fund's existing real estate portfolio as it already holds investments in very traditional real estate.

On the private side, Wisconsin owns real estate through commingled funds and joint ventures - linked to the four main property types: office, industrial, retail and residential property - while it also has relationships covering specialist property types such as hotels and student housing.

It also works with separate account managers, taking care of domestic and international public REITs.

The Fund Q fund of funds strategy, however, will allow Wisconsin to invest in a variety of commingled funds, rather than having its entire investment moved into a single commingled fund.

According to pension fund officials, the overall investment strategy for the Fund Q commingled fund is to replicate as nearly as possible the typical real estate portfolio composition of a large tax-exempt institutional investor.

Wisconsin had a real estate portfolio valued at $2.731bn by the end of September 2009, having invested 4.1% of its total plan assets against a target real estate allocation of 6%.