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Vermont on the hunt for non-core manager

The state’s pension investment committee has begun the search for a new value-added/opportunistic manager to diversify its $56 million real estate portfolio.

The Vermont Pension Investment Committee (VPIC) has authorized its consultant, NEPC, to conduct a search for a new value-added/opportunistic real estate manager.

The new non-core strategy is designed to diversify VPIC’s current real estate program, which primarily focuses on core investments. At its August 27 meeting, the pension system approved the new manager to oversee up to $56 million, essentially doubling the plan’s current real estate portfolio. VPIC does not yet know when it will issue a formal RFP, but a review of responses to the search is scheduled for the board’s November 26 meeting. 

The search comes in the wake of the $3.73 billion pension system’s decision to increase its target real estate allocation from 4.5 percent to 6 percent. The increase, introduced at the board’s March 26 meeting, will give VPIC more opportunities to invest in the non-core sector.

VPIC oversees Vermont’s total retirement system, which includes the pension plans of the Vermont State Retirement System, the Vermont State Teachers' Retirement System and the Vermont Municipal Employees Retirement System, as well as the City of Burlington Employees Retirement System. VPIC manages investments for the plans under a unitized fund structure and invests all four identically. Therefore, the four pensions will have the same real estate allocation under the new non-core manager.