The Ohio Police & Fire Pension Fund may invest up to $110 million on behalf of its non-core portfolio by the end of the year, in the hopes of increasing its total real estate allocation from 9.4 percent to 12 percent.
Pension spokesperson David Graham told PERE that the $110 million is a recommendation from its real estate consultant, The Townsend Group, to boost Ohio Police & Fire’s tactical allocation, but he is unsure if the Columbus-based pension will meet that goal in 2013. “The $110 million is left as a goal for the remainder of the year if the right opportunities present themselves,” he stressed.
In December, Ohio Police & Fire earmarked as much as $230 million for new real estate investments in 2013, with the hopes of shifting its property portfolio from 65 percent strategic and 35 percent tactical to an even split between the two risk profiles. So far this year, the pension plan has made two commitments to real estate— $45 million in June to the Savanna Real Estate Fund III, a value-added fund focusing on the office sector, and $50 million in April to USAA Eagle Real Estate Fund, an open-ended core-plus fund.
If Ohio Police & Fire chooses to reach its target, it will do so through commitments to non-core commingled funds focused on the US. Graham noted, however, that the pension plan is not likely to achieve its 12 percent target allocation by the end of the year, adding that the increase is a long-term goal.
For the first quarter of 2013, Ohio Police & Fire achieved a net return of 2.8 percent on its real estate portfolio. Of the pension’s $13.2 billion in total assets, $1.25 billion currently is allotted to real estate.