COLUMBUS, OH—In a recently filed document, the Ohio Public Employees Retirement System has revealed that it’s allocated more than $1.3 billion to invest in US real estate this year. The pension fund is looking to make these investments through various avenues, including direct separate accounts and commingled fund commitments, according to Investments & Pensions Europe.
OPERS did not respond to calls for comment. Specifically, OPERS is seeking niche opportunities that will yield core-plus returns with assets the meet core risk parameters, reports IPE. The investments will be made in various ways, including providing debt on existing office, industrial, retail and apartment properties, as well as in the secondary market through limited partnership interests in existing core commingled funds.
The pension fund is no stranger to either approach; IPE reports that it committed $600 million to secondary funds it bought into at discounts to stated asset values in 2010. Also in 2010, it set aside $1.7 billion to debt managers where the borrower has positive equity.
Additionally OPERS intends to invest in what it terms micro core properties, worth less than $10 million, an unusual strategy for pension funds. It also plans to pursue “selective non-core niche opportunities” in hotel and industrial assets for the foreseeable future.
The firm hopes to provide equity to fund new hotel development projects with a preferred equity position, and will consider lending on new development or redevelopment opportunities. The play for industrial assets will be only in debt—namely, providing bridge loans to be used in the repositioning of industrial properties.