The USD 20 billion pension fund plans to invest half of the USD 2.1 billion in 2010 and 2011. Employees’ Retirement System of Texas will spread the investments across the private real estate risk spectrum, investing in two to five core vehicles and committing the remaining capital to value added and opportunistic vehicles. It is hoping to make large commitments to a small number of funds in order to take advantage of lower fees and other benefits that are in place for larger investors in funds. It hopes its real estate portfolio will post returns of 9.4% and will be assisted in its investment decisions by RV Kuhns & Associates. It has a target allocation of 8% to real estate. A quarter of this target allocation is to listed vehicles, and the remaining 75% is targeted for private real estate funds.
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