Texas ERS to quadruple real estate exposure

The $21bn Austin-based retirement system will increase its overall real estate portfolio from 2% to up to 8% as part of a long-term diversification strategy, investing up to $600m in the next two years.

The $21 billion Texas Employees Retirement System will increase its real estate portfolio invested in real estate to between 7 percent and 8 percent in the next two years – up from its current 2 percent allocation.

In the next 24 months, the Austin-based public pension plan said it was looking to invest at least $600 million – and up to $1 billion – in real estate deals as part of a long-term diversification strategy.

As part of that drive, the pension – created in 1947 to oversee retirement benefits for Texas state employees – in April issued a $50 million request for quotation for a real estate emerging fund of funds manager focused on US markets.

The fund of funds mandate will target emerging managers focused on either debt or equity. A final decision is expected by August, a spokeswoman told PERE.

The request for proposal though is just one part of ERS’ plans to invest roughly 8 percent of its $21 billion portfolio in real estate over the next eight years.

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