The State Universities Retirement System (SURS) of Illinois has approved the selection of the Franklin Templeton Private Real Estate Fund and the Mesirow Financial Institutional Real Estate (MFIRE) Investment Program II for fund of funds mandates, according to documents from the SURS board. The Champaign, Illinois pension plan, which has $14.3 billion in total assets, committed $50 million to Franklin Templeton and $75 million to MFIRE.
SURS approved a search for opportunistic real estate managers in September 2011 and issued a request for proposals the following month. Prior to that, in June, SURS approved an asset allocation study that recommended an increase in the pension plan’s real estate allocation from 6.7 percent to 10 percent during fiscal year 2012, which ends on 30 June.
“The real estate portfolio is the asset class farthest away from its new policy targets, as of June 30, 2011, and so it should be addressed in a timely manner,” Daniel Allen, the pension plan’s chief investment officer, wrote in SURS’ 2012 investment plan, which was issued in September.
In the recent board documents, SURS said it will provide an update of the current real estate funding plan and discuss strategies for implementing the next phase of its real estate programme expansion.