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Alaska Retirement slates $400 million for real estate this year

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Alaska Retirement Management Board, Juneau, plans to commit up to $400 million to core real estate in the fiscal year ending June 30, 2022.

The board approved the recommendation by real assets consultant Callan as part of its fiscal year 2022 annual investment plan at its board meeting Sept. 24, said liaison officer Alysia Jones in an email.

The board, which oversees the management of $41 billion in defined benefit and defined contribution plan assets, including the $23.5 billion Public Employees’ Retirement System and $11 billion Teachers’ Retirement System, plans to make new and/or follow-on commitments totaling $135 million to open-end, core real estate funds.

As of July 31, the board had $348 million in the BlackRock U.S. Core Property Fund, $158 million in the J.P. Morgan Strategic Property Fund, managed by J.P. Morgan Asset Management, and $42 million in the UBS Trumbull Property Fund, managed by UBS Realty Investors, according to an investment report included with board meeting materials.

Also, the board plans to add $140 million and $120 million, respectively, to existing core real estate separate accounts managed by UBS Realty Investors and Sentinel Real Estate. The portfolios had $667 million and $183 million, respectively, in assets as of July 31.

The board was also informed that CIO Zachary A. Hanna plans to make an additional $300 million in farmland commitments over time to bring it to target. According to meeting materials, Mr. Hanna has discretionary authority to make farmland commitments.

No changes were recommended in the board’s infrastructure or timberland portfolios.

The fiscal year 2022 investment plan is designed to bring the real assets portfolio to its new target of 14%. The board had approved increasing the target to 14% from 13% at its June 18 meeting.

The board had also increased its target to private equity to 14% from 12% and dropped targets to domestic equities to 27% from 28%, fixed income to 21% from 22%, and international equities to 18% from 19%.

As of June 30, the actual allocation to real assets was 12.3%. Within that allocation, real estate comprised 6.1% of the total fund; farmland, 2.7%; infrastructure, 2.2%, timberland, 1.1%; and energy, 0.2%.

Within the real assets portfolio, targets are 35% core real estate, 25% farmland, 15% each infrastructure and real estate investment trusts and up to 10% timberland.

The board does not issue RFPs.