Oklahoma Pension Fund To Invest In Real Estate For First Time
REAL ESTATE – The Oklahoma Police Pension and Retirement System has decided to invest in real estate for the first time with a new commingled fund manager search.
The pension fund has Judy Collins at its chief financial officer. She said: “Our consultant has told us that by investing in real estate we can achieve more diversification within our investment portfolio and have the possibility for higher returns.”
Oklahoma Police has Asset Consulting Group as its consultant. The person working with this person fund for the consultant is director Jason Pulos.
The pension fund decided to start investing in real estate by issuing an RFP for a core commingled fund real estate manager. The institutional investor took this action at its board meeting on January 17.
The responses for the manager search are due to the pension fund on March 2 at 4pm CDT. Oklahoma Police will hear from finalists and make a final decision in May. Its projected that a contract with the winning manager will be signed in early July.
The pension fund has allocated from $40m to $50m for the manager search. It has established a 5% allocation for real estate. The only real estate that Oklahoma Police holds is the building that it is located in.
Most pension funds when starting to invest in real estate prefer a core commingled fund strategy. A lot of this capital goes into open-ended core funds. This gives the institutional investor the greatest chance for immediate diversification.
Us Why Large Pension Funds Are Investing In Private Real Estate
Real estate agents and investors across the country, from California to Florida, have noticed an uptick in offers submitted by institutional investors . Large pension funds are competing with investors and homeowners to buy everything: single-family homes, multifamily, commercial spaces few asset classes are exempt. These deep pockets cannot resist the action, and for good reason. As the co-founder of a company that invests in private real estate, Ive seen how property investments can provide greater diversification, income and yield opportunities than stocks and bonds.
Managing physical assets, however, comes with its own hassles and overhead. However, to avoid hands-on stewardship, many of these investors are now allocating funds to private real estate funds as opposed to other investment vehicles.
In this article, well uncover how private equity enables institutional investors to reap the many benefits of real estate without inheriting the maintenance and management issues.
The funding ratios of the Netherlands largest five pension funds have reached their highest levels since 2008. Civil service… read more
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Top 100 Largest Public Pension Rankings By Total Assets
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Canadian Pension Funds Hunt For Pandemic Real Estate Bargains
By Maiya Keidan
4 Min Read
TORONTO – Canadian pension funds are seeking to boost their real estate investments, betting the slumping property market will recover as the COVID-19 pandemic recedes and office workers and city dwellers return to downtown properties.
Canadian pension funds held $278.7 billion in property assets in 2019, up 4% from 2018, according to the Pension Investment Association of Canada, making them the countrys largest real estate owners.
In a world of slower economic growth, very low interest rates, volatility in equity markets, real estate offers an attractive opportunity for pension funds, which take a long-term investment horizon, say market participants.
Were looking for buying opportunities, said Hilary Spann, Head of Americas, Real Estate at CPP Investments, which manages $456.7 billion. CPPs real estate portfolio generated 5.1% return for the year ended March 2020.
CPP announced a U.S. joint venture with Greystar Real Estate Portfolio to build multiple separate housing units this month, a deal that was initiated pre-pandemic.
In November, it signed an agreement with Hudson Pacific Properties to acquire an office tower in Seattle. Spann said a lot of buyers that would have been competitive in the Seattle deal were temporarily on the sidelines. So we were able to step in and pick up that asset at yields that we thought were quite attractive.
Pension Funds Want To Hold Residential Property
UK – Pension funds are interested in investing in UK residential property vehicles if some form of institutional residential investment market can be established, according to the British Property Federation .
Gareth Lewis, director of finance and investment at the BPF, told IPE Real Estate the professional body is currently investigating how to develop a UK residential property market as an asset class of interest to pension funds, along with the creation of residential Reits, as the group believes there is sufficient interest and this would help to meet the government’s own 2020 target for social housing development.
More specifically, Lewis noted the UK residential sector is still one of the few established real markets failing to attract institutional investment because systems are still not in place to secure sufficient liquidity, management and pricing facilities.
“The most striking thing about the residential letting market and the financing and capital is institutional investors haven’t gone anywhere near it despite the fact it is an asset class they should have been involved in,” said Lewis.
“It has always been seen has high risk because the income has to come through capital gains. It is an owner-occupied dominated market because people are more concerned with where they live rather than the income returns.
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What Pension Funds Need To Know About Commercial Real Estate
I was recently at a dinner party where I had the opportunity to talk with a New York City teacher, who kept pretty good tabs on her pension funds performance. She was worried about if, when the time came, there would be enough to fund her retirement and asked me point blank, Where should we be investing?
Without hesitation I said, Commercial real estate.
Historically, in order to protect assets, pension funds would invest in safer, low-risk products. Yet recently, pension funds have played on the risk spectrum as yields compress in their traditional asset classes. We have noticed increased inquiries from both pension fund advisors and asset managers asking about increasing allocations into real estate. And the trend has only picked up in the last 12 months.
A 2018 study from PREA, as reported by National Real Estate Investor, showed that during the next two years, 56% of global pension investors expect to increase their real estate investments to about 10% of their total capital allocation. The study also found that pension fund investors intended to commit at least $60 billion to real estate globally in 2018.
The funding ratios of the Netherlands largest five pension funds have reached their highest levels since 2008. Civil service… read more
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Directory Of Top 100 Pension Fund Managers
NREI presents the Top 100 Pension Fund Managers as ranked by Nelson Information Inc., Port Chester, N.Y., based on real estate assets managed as of July 23, 1997. Combined, these 100 firms manage $241.5 billion out of the total $256.6 billion of real estate assets managed by all real estate investment management firms.
Denotes a tie
1 ERE Yarmouth Real Estate Assets : 24754.9 Year Founded: 1859 3424 Peachtree Road, N.E., Atlanta, GA 30326 Douglas A. Tibbetts, Pres.
2 CIGNA Investment Management, Real Estate Real Estate Assets : 14017.0 Year Founded: 1967 S-314 , Hartford, CT 06152-2314 Philip J. Ward, Investment Officer
3 John Hancock Real Estate Investment Group Real Estate Assets : 10827.0 Year Founded: 1966 Hancock Place 53rd Floor, Boston, MA 02117-0111 Kevin Mcguire, Pres.
4 LaSalle Advisors Limited Real Estate Assets : 10114.1 Year Founded: 1968 200 E. Randolph, Chicago, IL 60601 Stuart L. Scott, CEO
5 Heitman Capital Management Real Estate Assets : 9778.0 Year Founded: 1966 180 N. LaSalle St Chicago, IL 60601-3100 Charles Wurtzebach, CEO
6 AMP Investments Australia Ltd. Real Estate Assets : 8154.0 Year Founded: 1849 GPO Box 4134, Sydney 2001 Australia Andrew Threadgold, CEO
7 Prudential Private Asset Management Group Real Estate Assets : 8130.3 Year Founded: 1970 8 Campus Drive, Parsippany, NJ 07054 Les Horsager, CEO
9 General Growth Properties Real Estate Assets : 6700.0 Year Founded: 1993 55 W. Monroe, Ste. 3100, Chicago IL 60603 Matthew Bucksbaum, CEO
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The Largest Public Pension Allocations To Private Real Estate By Consultant In 2021
Understanding where public pension funds are making their investments can be a huge piece of an investment salespersons day. However, it can also be a time consuming task, given the sheer number of pension funds across the country.
At Dakota, weve been fundraising since 2006, and have raised over $40B for our partners in that time. Weve made it part of our DNA to stay on top of public pension fund investments, and we want to help make these updates as accessible to our peers as possible.
In this article, were going to break down the largest public pension allocations to Private Real Estate by General Consultants in 2021. By the end of this list, youll have a great starting point to better understand which consultants are making the largest allocations.
Meketa Investment Group: $1785000000
Investment strategies:
- Carlyle Realty Partners IX: $180,000,000
- Hudson Single Family Rental Fund: $150,000,000
- Basis Investment Group Real Estate Fund II: $125,000,000
- Bain Capital Real Estate Fund II: $100,000,000
- Prime Property Fund: $100,000,000
- Nuveen U.S. Cities Multifamily Fund: $100,000,000
- Penwood Select Industrial Fund VI: $100,000,000
- Horizon MH Fund II Co-Invest: $100,000,000
- Covenant Apartment Fund X: $75,000,000
- Invesco Real Estate Asia Fund: $75,000,000
- Heitman Value Partners V: $65,000,000
- CBRE Strategic Partners US Value IX: $55,000,000
- Rubicon First Ascent: $50,000,000
- Carlyle Realty Partners IX: $50,000,000
- Torchlight Debt Opportunity Fund VII: $50,000,000
- Basis Investment Group Real Estate Fund II: $50,000,000
- American Landmark Fund III: $30,000,000
- TerraCap Partners V: $14,000,000
- Carlyle Realty Partners IX: $8,000,000
- Taconic Commercial Real Estate Dislocation III Fund: $8,000,000
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Abstract. Pension funds and insurance companies in the Netherlands allocate, on average, over 15% to equity real estate. This suggests that they hold different beliefs and/or apply different decision rules than their U.S. counterparts, who typically have allocated only about 4% of their wealth to real estate. A personal survey was conducted to test whether the findings of similar surveys on U.S. real estate portfolio management practices also hold for Dutch institutions. Unlike the Americans, for example, the Dutch are found to not systematically adjust for risk and to invest in real estate because of its inflation-hedging capacities.
The Journal of Real Estate Research is the official publication of the American Real Estate Society . Our Journal’s focus is to investigate and expand the frontiers of knowledge that cover business decision-making applications through scholarly real estate research. ARES has a special interest in research that can be useful to the business decision maker in areas such as development, finance, management, market analysis, marketing, and valuation.
Pension Funds Returning To Real Estate But They Haven’t Forgotten The ’80s
Melanie F. Gibbs | Sep 01, 1995
In the late-’80s and early-’90s pension funds — like many other investors — were burned by the “death and destruction” of the real estate downturn, but by the end of the decade, the size of their assets will probably surpass the National Debt, so it’s back on the real estate wagon they go…
Pop Quiz: You’re a pension plan sponsor whose contributions have gone up more than 12% in the last five years. The stock and bond markets, which have made up a sizeable chunk of your asset allocation in the past, are becoming less attractive investments, but your actuarially required rate of return has not decreased. You have to meet your investment obligations somehow what do you do? What do you do?
Though many plan sponsors may just feel like they’re on a speeding bus, with mad bomber Dennis Hopper poised at the trigger and waiting for an answer, the question is indeed being riddled over by the pension industry today. Of course, this is not a movie — and you can’t shoot the hostage — so, if you’re like thousands of other investment officers under the gun, you’ll take a second look at real estate and decide it’s worth another try.
The reality of the situation is this: In 1994, pension plan assets totaled more than $2.6 trillion, according to Greenwich, Conn.-based Greenwich Associates. These assets are estimated to hit more than $3.2 trillion by 1997.
To what does real estate owe this rededication of funds?
Multifamily heads some lists
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Investing In A 21st Century Real Estate Portfolio
Real estate is a fundamental asset class with investment characteristics that have delivered important portfolio benefits to institutional investors for decades. However, the economy and the real estate that houses the economy are very different today compared with when many institutions began building their real estate portfolios. These differences have important implications for how asset allocators are investing their real estate capital today.
Todays REIT industry provides access to 21st century real estate sectors, including infrastructure, cell towers, data centers, and networked logistics properties that house the growing digital economy.
Institutional investors are increasingly utilizing REITs to gain access to these new economy sectors as part of a portfolio completion strategy. A portfolio completion strategy is a tool investors have to invest in property sectors, including new economy sectors, that complement the traditional real estate property types in order to achieve more robust diversification, boost portfolio investment returns, and dampen volatility.
Fg Invests 289% Of Pension Funds In Real Estate
Maduka Nweke
About N224.30 billion of pension funds representing about 2.89 per cent of pension assets has been invested in the real estate sector of the economy going by statements from the National Pension Commission .
PenCom, decision followed pressures from stakeholders urging the regulator not to allow pension funds to be lying idle in the vault but to allow Pension Fund Administrators to invest the growing pension assets in the housing industry, particularly in real estate, in addition to investing it in infrastructure.
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The total pension assets as at January 31, 2018, under the Contributory Pension Scheme , according to Commission, rose to N7.737 trillion as against the total of N5.14 trillion it stood as at October 2015.
The PFAs have invested these funds in different classes of assets, with a total of N224.30 billion only being invested in real estate. This, according to some pension experts, is as a result of the toxic nature of the sector and inability to provide adequate risk mitigation tools to guide the investment of pension assets in the sector.
The Commission, in a statement in its website stated that, pension fund managers in Nigeria are amenable to investing part of the pension funds in infrastructure and real estate through viable and secure investible outlets.
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So How Much Real Estate Should Be In A Pensions Portfolio
Pension, endowment, and foundation funds control over $12 trillion in total assets, with approximately $900 billion invested in real estate.
More detailed asset allocation methods that include a broad mix of asset classes and consider returns, correlations, and volatilities consistently, demonstrate that a meaningful allocation to real estate, somewhere in the 13 to 20% range, is appropriate.
The charts below represent analyses of historical REIT performance using varying methodologies of optimization. A recently released analysis from Morningstar Associates, using the Black-Litterman methodology, found that the inclusion of REITs in a portfolio may increase the return for a given level of risk. For example, an aggressive portfolio targeting a 14% standard deviation and 5.8% return is estimated to have a 13% REIT allocation.
Even though pension fund allocations to real estate have increased over the past several years, on average, the target weight to real estate at 8 to 10% is less than market weight, and lower that of what other models would suggest as being optimal. This suggests that the majority of pension funds may not allocate enough to real estate to fully derive its portfolio benefits.
What Are The Challenges Of Managing A Real Estate Portfolio
REITs can help address a number of the portfolio management challenges that face todays real estate investor. A powerful strategic and tactical tool, REITs enable investors to act on their convictionsfacilitating portfolio completion and rebalancingand provide the opportunity to capitalize on market opportunities.
#1: It is difficult to fully invest in the entire real estate asset class globally.
Late last century, when pension funds began investing in real estate, portfolios were constructed principally of private market investments in office, retail, and industrial properties, which became recognized as the core or traditional property types. The economy and the real estate that houses it is dynamic and has evolved over the decades.
Today, investors have broad menu to choose from both in terms of property types and geographies. A 21st century real estate portfolio has efficient access to traditional and non-traditional property sectors globally. REITs enable investors to optimize property and geographic exposures within their real estate allocation, delivering access to traditional core property sectors and beyond including hotel, self-storage, healthcare and life sciences sectors as well as the new economy property sectors like infrastructure, data centers, and networked logistics and industrial properties that support the secular trends toward e-commerce and the digital economy.
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