Investors - MAY 22, 2014

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Texas ERS aims to commit $325m to real estate during fiscal year

by Reg Clodfelter

The approximately $25 billion Employees’ Retirement System of Texas is aiming to commit at least $325 million to real estate in three to 15 deals during fiscal year 2015 with an upper limit of $487.5 million, according to recently released board documents.

The retirement system decided to increase its target allocation to real estate from 8 percent to 10 percent in February 2013, and, with a current allocation of 7.1 percent as of March 2014, Texas ERS expects to meet its target by the end of fiscal year 2016.

Texas ERS expects the majority of the capital to be deployed in 2015 to be invested in noncore strategies because the retirement system has very little committed capital left to invest in the core space. As a percentage of total unfunded capital, core represents only 5 percent compared with 45 percent for value-added and 50 percent for opportunistic. Furthermore, 70 percent of the capital allocated to oppo

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