Investors - JUNE 25, 2014

Wisconsin may invest up to $500m in real estate by year-end 2014

by Reg Clodfelter

The State of Wisconsin Investment Board, which manages $104.6 billion for the state of Wisconsin, could invest between $250 million and $500 million in real estate before the end of 2014, according to Chris Preisler, communications specialist with SWIB.

New investments could be in the form of separate accounts, joint ventures or commingled funds, though the board is currently leaning toward separate account strategies. The board also expects to predominantly focus on core/core-plus strategies with low leverage levels, and is looking primarily at domestic opportunities. Upcoming commitments could go to SWIB’s current real estate managers or new ones, depending on which options present the most compelling opportunities.

SWIB has already committed $230 million to real estate in 2014, divided between two commitments: a $150 million commitment to Bentall Kennedy Medical Office Fund, managed by Bentall Kennedy, and an $80 million commitment to WESCO IV, the fourth in a series of joint ventures between SWIB and Essex Property Trust.

SWIB’s target allocation to real estate is 7 percent of its Commingled Trust Fund, which comprises $88.3 billion of the $104.6 billion in assets it manages, and its current allocation is 6.8 percent. To this end, no new investments are needed if compelling opportunities do not arise, though Preisler noted in an email that SWIB “would be comfortable” with new investments totaling between $250 million and $500 million.

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