The Health Care Fund managed by the Ohio Public Employees Retirement System is to increase its target allocation to US real estate investment trusts (REITs) from 6% to 7%, according to a board meeting report.
The change is part of a new asset allocation, which includes ending its 5% hedge-fund allocation and lower emerging market debt from 6% to 2%.
The Health Care Fund鈥檚 $694m (鈧�579m) REIT portfolio represented 5.6% of its $12.3bn of assets at the end of September, implying an additional $130m in investment capacity.
Ohio PERS told 91传媒在线 that the new REIT allocation was designed 鈥渢o provide moderate inflation protection鈥�.
The fund鈥檚 REIT portfolio has marginally outperformed its benchmark 鈥� Dow Jones US Select Real Estate Securities Index 鈥� over the past three and five years, by 2bps and 1bps, respectively.
Ohio PERS believes the new asset allocation will help save $6.2m in annual management fees and is projected to generate a higher 10-year return of 5.6%, versus 5.48% for the previous asset allocation.
