The $15.34 billion Ohio Police & Fire Pension Fund has reported a 2.1 percent net return for its real estate portfolio during the second quarter 2017 and a 12-month net return of 8.1 percent for periods ended June 30, 2017, according to David Graham, communications manager for the pension fund.
OP&F’s real estate consultant, The Townsend Group, reviewed the performance at the pension fund’s October investment meeting.
The pension fund adopted a risk parity approach in 2010 that allows a portion of its investment portfolio to be conservatively leveraged, reducing the total expected risk of the portfolio without sacrificing the expected return. Essentially, the risk parity approach balances OP&F’s exposure among investment classes that perform differently in various economic and market environments.
In June, OP&F adopted a new long-term asset allocation policy, which slightly increased expected returns while at the same time reduced expected risk versus OP&F’s current long-term allocation policy. The board adopted the new policy after extensive discussions over the course of three months with staff and general investment consultant, Wilshire Associates.
In additional news, OP&F reported a 14.27 percent total fund return for fiscal year ending June 30, 2017.
OP&F has a target allocation to real estate of 12 percent and an actual allocation of 10.9 percent.
