SERS Ohio outlines 2023 Pacing Plan

Name: School Employees’ Retirement System of Ohio
Headquarters: Columbus, United States
AUM: $17.14 billion
Allocation to alternatives: 22%

School Employees’ Retirement System of Ohio (SERS Ohio) confirmed its real estate pacing plan for 2023 in to materials from a recent board meeting.

Portfolio Goals for 2023-2024:

• Developing new strategies that can profit from market disruptions
• Seeking more co-investment opportunities
• Exploring the expansion of listed Real Estate strategies

Real Asset Allocation

• Maintaining allocation between 14-22 percent
• Exploring standalone allocation for Infrastructure and Real Estate

Infrastructure

• Expanding the co-investment program
• Assessing higher-return strategies with best-in-class managers and operators in sectors with a favorable outlook
• Exploring listed Infrastructure strategies

Portfolio Structure – Strategy

The largest exposure, at 72 percent, continues to be private real estate (core and non-core). Throughout the last year, the allocation has marginally increased. On a relative basis, infrastructure decreased from 28 percent in 2021 to 27 percent in 2022 as real estate gains outpaced infrastructure growth.

SERS’ managers are increasing their exposure to cities with desirable demography and strong economic development. The South and West have been the best-performing regions. SERS Ohio invested $5.1 million in real estate and infrastructure, up from $1.7 million in 2021.

The distribution of real estate is 75 percent core real estate, 25 percent value-add and opportunistic. Private real assets consist of 25 percent Timber and 75 percent infrastructure (inclusive of agriculture).

The $17.14 billion public pension currently allocates 21.8 percent of its total investment portfolio to real assets, comprising almost $3.7 billion in capital. Its recent real estate fund commitments have focused on value-add and opportunistic vehicles that invest in North America.