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SERS Ohio boosts real assets target allocation

The US public pension is increasing its real assets target allocation from 15% to 17%, with the target expected to be reached by June 2022.

Institution: School Employees’ Retirement System of Ohio
Headquarters: Columbus, US
AUM: $16.53 billion
Allocation to real assets: 14.7%

School Employees’ Retirement System of Ohio has approved a rise in its real assets target allocation, according to materials from the pension’s February 2021 board meeting.

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Highlights from SERS Ohio’s February 2021 board meeting:

  • Increase target allocation from 15 percent to 17 percent with a wider permitted range of 14 percent to 20 percent.
  • Evaluate new core and non-core real estate managers.
  • Increase weighting of industrial property type within real estate portfolio.
  • Focus on income-producing core strategies.
  • Retain small allocation to public real estate to provide portfolio liquidity.
  • Pursue “demographic-driven real estate” such as data centers, life sciences and medical office property over “GDP-driven real estate” such as offices.
  • Maintain exposure to property investment in the East and West United States, with less exposure in the South and Midwest. Target cities with favorable demographic trends and strong economic growth.
  • Evaluate specific opportunities arising from the impacts of covid-19 and the subsequent economic slowdown, eg, opportunistic opportunities involving real estate capitalizations.
  • Confirmed a $100 million commitment to Carlyle’s open-ended core-plus Property Partners vehicle.

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Recent private real estate commitments by SERS include $40 million to Harrison Street Real Estate Capital’s open-ended Social Infrastructure fund and $50 million to Almanac Realty Securities VIII.

SERS’ chief investment officer is Farouki Majeed, who has been in the role since July 2012. Previously Majeed worked for California Public Employees’ Retirement System and Abu Dhabi Retirement Pensions and Benefit Fund.

As of January 2021, SERS was recruiting for a senior investment officer for its real assets portfolio.

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