Arkansas to commit $250m to RE funds in 2010

The $11bn teachers pension system will continue to increase its allocation to real estate and private equity eyeing new fund commitments this year – but only if they’re the right deals.

Arkansas Teachers Retirement System is eyeing possible real estate fund investments in 2010, with plans to commit up to $250 million to around five vehicles.

Executive director George Hopkins told PERE the US pension fund was continuing its plan to gradually increase its actual allocation to real estate from its current level of 6.2 percent. ATRS has a target allocation to real estate of 10 percent.

Hopkins said the pension was looking to invest up to $250 million to no more than five private equity real estate funds this year, but warned Arkansas wouldn’t deploy capital if “we don’t find the right deals. We don’t have to make the investments if it’s not right”. Arkansas’ real estate portfolio is valued at $600 million.

ATRS has yet to commit to a real estate fund in 2010, however the fund, which had $11 billion of assets as of the end of June 2008, committed $25 million to Franklin Park Venture Series 2010 as part of its private equity programme.

Arkansas is increasing its allocation to private equity to a target of 10 percent against an actual allocation of 6.8 percent, as of the end of September 2009. Hopkins said the pension was looking to invest up to $200 million more capital to roughly four or five private equity funds in 2010 – but only if they were the “right deals”.

Hopkins said the pension’s private equity portfolio was valued at around $725 million and was “starting to show some rebound now”.