TMRS outlines revised real estate pacing plan

Institution: Texas Municipal Retirement System
Headquarters: Austin, US
AUM: $34.50 billion
Allocation to real estate: 9.1%

Texas Municipal Retirement System has confirmed an update to their 2021 real estate pacing plan, according to meeting materials. Following an external review, the US pension fund has raised its real estate pacing plan by 50 percent to $1.2 billion. TMRS has also lifted its target allocation to real estate from 10 percent to 12 percent.

The $34.5 billion pension fund had targeted $800 million worth of new real estate commitments in 2021, and aims to shift the core investments within their investment portfolio. Having committed over $1 billion in real estate capital in 2020, the pension has doubled down on the asset class by announcing a further $380 million in real estate commitments.

In addition to a $200 million commitment to a co-investment fund alongside Ascentris, Texas Municipal has also announced commitments of $80 million to Grandview II and $100 million to Transwestern Strategic Partners Fund III. The pension has formed a strategic relationship with Denver-based Ascentris, targeting the value-add property markets across the United States.

Grandview Partners’ second series North American core fund follows Grandview I-C, which held a final close in December 2020 just shy of $100 million. Transwestern Investment Group launched their third value-add fund in January 2021, targeting $450 million in investor capital.

As illustrated below, TMRS’ recent real estate commitments have tended to target diversified North American vehicles which seek a value-add return.

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