FEATURE: Shifting appetites

There have been a number of institutional portfolio changes over the last 12 months affecting the real estate allocation. Here is a selection of some of them, beginning with the most recent. PERE magazine December 2009-January 2010 issue

Stanford Management Company (SMC)
The investment manager for California-based Stanford University said it would be selling as much as $1 billion of its holdings. This includes investments in private equity, real estate, venture-capital, oil-and-gas, and timber.

Government of Singapore Investment Corporation (GIC)

The sovereign wealth fund reduced its exposure to public equities while increasing its stake in private equity. It has raised its real estate exposure from 10 percent to 12 percent. 

Teachers' Retirement System of Texas

The system has adopted a new investment strategy by engaging LaSalle Investment Management in a separate account structure to invest $205 million into real estate as well as make future commitments to new projects.

California State Teachers' Retirement System (CalSTRS)
It announced its latest strategic move, temporarily transferring 5 percent of its existing portfolio from global equities to fixed income, real estate and private equity.  

Korea Investment Corporation

The Seoul-based corporation, which manages assets entrusted by the government and the Bank of Korea, is planning to invest $1 billion in alternative assets overseas. The wealth fund which is banned from purchasing domestic assets expects to receive a $3 billion injection from the South Korean government. It reportedly must invest a third of it in alternative assets.

Alaska Permanent Fund Corporation

It has revamped its asset allocation strategy, creating a new “real assets”category which covers real estate and infrastructure and treasury inflation-protected securities. The targeted 18 percent allocation to real assets comprises 12 percent of real estate, up from 10 percent previously and 3 percent to infrastructure and treasury inflation-protected securities.

Norwegian Government Pension Fund
The oil fund put the brakes on its debut real estate spending plans as global market conditions continued to worsen.  The €267 billion fund has allocated 5 percent to real estate, but said it would not impose a “fixed investment plan” in the current environment.

Contra Costa County Employees Retirement Association

The association was reportedly planning to withhold a proposed $75 million commitment to Morgan Stanley’s latest global real estate vehicle, Morgan Stanley Real Estate Fund VII Global. The pension was considering reversing the decision due to concerns about investing in opportunity funds which employ high leverage.

China Investment Corporation (CIC)

CIC was said to be looking to focus its investment activity onto natural resources, fixed income and real estate. The move came after a series of losses on investments in public equity. As part of its real estate and infrastructure drive, CIC is looking to recruit market researches, analysts and investment managers.

United Nations Joint Staff Pension Fund

The pension plan was said to be moving into the funds of hedge funds and private equity space, and grow its real estate portfolio. The $35 billion fund reportedly wants to expand its real estate portfolio, currently valued at around $1.8 billion, to include infrastructure, agricultural land and timberland.