Real estate equity investments accounted for 5.3% of the average defined benefit plan's total assets as of Dec. 31, according to a survey conducted by the Pension Real Estate Association, Hartford, Conn.
Also, two-thirds of the real estate equity investments held by PREA members were in core strategies; nearly 16% were value-added, and 17% were opportunistic.
PREA polled 46 members, representing more than $1 trillion in total assets and $90 billion in real estate investments, and supplemented its findings with data from Standard & Poor's Money Market Directory and Nelson's Plan Sponsors Directory, said Jack Nowakowski, director of research at PREA.
In all, 20,000 pension funds were included.
There were no great surprises in property type allocations, Mr. Nowakowski said.
Office accounted for 35.3% of holdings, followed by retail, 19.3%; multifamily, 17.3%; industrial, 15.1%; and hotels, 3.2%.
The average asset allocation of the universe of funds included in the study was: U.S. stocks, 43.2%; U.S. bonds, 26.9%; international stocks, 13.2%; real estate equity, 5.3%; venture capital, 3.4%; international bonds, 1.6%; real estate mortgages, 0.4%; company stock, 0.3%; U.S. balanced, 0.2%; insurance accounts, 0.2%; cash, 2.3%; and other, 3%.
Mr. Nowakowski also noted that since PREA members have a special interest in real estate investments, their average allocation to real estate was higher than that of non-members.
Of those surveyed, 8.4% of their assets were in real estate-related investments, including commercial mortgage-backed securities and other debt instruments.
Holdings in real estate equity came to 7% of reported assets.
The survey found that the bulk of the real estate assets, 90.1%, are in private investments, and just under 10% are public, mainly REIT holdings.