The School Employees Retirement System of Ohio (SERS Ohio) announced in a recent press release that its board has approved a structural change to the retirement system’s real assets portfolio, splitting it into two separate allocations: real estate and infrastructure.
Infrastructure allocation has increased in recent years to where it now stands, making up 32 percent of SERS Ohio’s real assets portfolio. Previously, SERS Ohio’s real assets benchmark had been the NCREIF Property Index (NPI), which includes only real estate. By separating real estate and infrastructure, the retirement system will be better able to evaluate the performance of both asset classes.
SERS Ohio is splitting its 20 percent real assets target allocation into a 13 percent target for real estate and a 7 percent target for infrastructure. The NPI will still be used for the real estate benchmark, while infrastructure will use the benchmark of CPI + 1.2 percent per quarter, smoothed over a four-