NC Treasury outlines its 2023 real estate strategy

North Carolina State Treasury highlighted its real estate portfolio performance and outlined future objectives in its recent meeting.

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Name: North Carolina State Treasury
Headquarters: Raleigh, US
AUM: $113.2 billion
Allocation to alternatives: 13.07%

North Carolina State Treasury reviewed its private real estate strategy and outlined its investment approach for the year 2023 in its May investment committee meeting.

The Raleigh-based public pension committed $1.2 billion to private real estate funds from Q2 2022. These include:

According to the NC Treasury’s Q4 2022 portfolio report, the pension allocates 33.6 percent of its real estate portfolio towards residential-focused funds, followed by 22.7 percent to industrial sector funds.

The pension fund’s portfolio is dominated by Western US-focused real estate investments, with foreign assets being least represented.

The investment management meeting concluded with the following key objectives outlined for NC Treasury’s RE portfolio.

  • Reduce manager count and increase focus on separate accounts.
  • Increase exposure to public real estate due to lower security trading prices.
  • Increase exposure to industrial, multi-family, self-storage and small strip center retail sectors.
  • Decrease exposure to office, large retail and hotel sectors.

North Carolina State Treasury allocates 2 percent of its portfolio towards non-core real estate, against a 3 percent target. It also allocates 5.75 percent of its investments towards core real estate, which is above its 5 percent target.

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