Ohio Police & Fire to invest up to $230m in 2013

The $12.4 billion pension plan is looking to reach its 12 percent real estate target and is targeting non-core fund investments to get there.

The $12.4 billion Ohio Police & Fire Pension Fund has allotted as much as $230 million for new real estate investments in 2013. Recommended by pension's real estate consultant, The Townsend Group, and approved by its Board of Trustees in mid-December, the planned commitment is part of a 2013 real estate investment plan designed to get Ohio Police & Fire up to its 12 percent real estate target. The current allocation to real estate is 10.1 percent.

All of the capital set aside for real estate in 2013 is earmarked for investments in the tactical, or non-core, portion of Ohio Police & Fire's real estate portfolio. There is no specific capital allocated for the strategic, or core, portion of the portfolio, although the pension plan may consider core investments on a selective basis. The existing portfolio currently is 65 percent strategic and 35 percent tactical, and Ohio Police & Fire apparently would like to get that split closer to a 50:50 arrangement.

Furthermore, all of Ohio Police & Fire’s real estate investments next year will be made through commingled funds, with individual commitments ranging from $30 million to $70 million per fund. All such investments will be sourced through Townsend.

Another of Ohio Police & Fire's goals for 2013 is to increase its exposure to international real estate, which now accounts for just 8 percent of the real estate portfolio. Prior commitments have included commingled funds targeting both Europe and Asia, including a $30 million commitment to Fortress Investment Group’s Fortress Japan Opportunity Fund II earlier this year. Ohio Police & Fire previously had committed $25 million to Fortress Japan Opportunity Fund I in 2010.