The US Federal Reserve is diversifying its retirement system through new investments in private equity and real estate.
The central bank shifted some of its retirement system investments into the two asset classes last year, according to the central bank’s yearly statement released on Friday. The retirement system provides funds for employees in Washington DC and nationwide.
Last year, the central bank shifted 1.7 percent of its portfolio into real estate and 1.3 percent into private equity, slightly decreasing its allocations to equities and bonds.
The Fed valued its real estate investments at $214 million and private equity at $157 million, and the entire investment portfolio was valued at $12.5 billion as of December 31.
The central bank has invested in two core US real estate funds focused on “high quality, well leased, low leverage commercial real estate” and in a real estate limited partnership that “invests in non-core US commercial real estate including development and repositioning of assets.”
The Fed hires investment managers for the retirement fund, according to the statement.