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Jacksonville pension fund looks to double RE exposure

The $850m police and fire pension fund aims to take advantage of discounted US property prices by increasing its allocation to the sector from 10 percent to 20 percent. In submitting a bill to Florida lawmakers, Jacksonville hopes to grow its real estate portfolio to $170m.

The Jacksonville Police and Fire Pension Fund has approached Florida’s state legislator to seek approval to double its allocation to real estate.

In a bill submitted to the Florida House of Representative’s Economic Development & Community Affairs last month, the pension fund requested an increase in its allocation to real estate from 10 percent to 20 percent.

The bill is currently being considered by the state house’s Finance and Tax Council and if passed, could see the $850 million pension fund growing its real estate allocation to approximately $170 million.

The pension fund’s current allocation to the sector was laid out in its Statement of Investment Policy, which was approved by its Board of Pension Trustees in May 2004. In that policy, the pension fund said it would allocate 50 percent of its capital to domestic stocks, 30 percent to domestic fixed income securities and 10 percent to international stocks as well as 10 percent to real estate.

The change in strategy is reportedly designed to reflect the current economic climate, in which many domestic stocks, for example, have performed badly. In the meantime, the amount of discounted real estate in the US is increasing, presenting ample buying opportunities for investors with available capital.

The Jacksonville Police and Fire Pension Fund has invested on behalf of the city’s full-time police officers and firefighters since 1937. It is administered by a five member board of trustees.