Investors - MARCH 21, 2016

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Federal Reserve pension enters real estate

by Andrea Waitrovich

The Federal Reserve has shifted some of its employees’ retirement savings into real estate for the first time, according to its 2015 year-end report, released March 18.

During 2015, the central bank’s pension plan had 1.7 percent of its assets under management, or $214 million, invested in real estate. Its allocations toward bonds and equities were reduced to make way for real estate to diversity its holdings. The entire investment portfolio was valued at $12.5 billion as of Dec. 31, 2015.

The retirement system’s investments include two U.S. core real estate funds that invest in “high-quality, well-leased, low-leverage commercial real estate” and a real estate partnership that invests in “noncore U.S. commercial real estate, including development and repositioning of assets.”

The Federal Reserve’s retirement system anticipated funding level for 2016 is $480 million for its portfolio.


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