Pennsylvania Municipal Retirement System, Harrisburg increased its overall target allocation to real estate and might search for core real estate or timber managers later this year, said James Allen, secretary of the $1.7 billion pension fund.
The board at its meeting on Thursday approved a recommendation to increase the overall target to real estate to 20% from 15%. The current real estate target of 15% is split between core real estate, at 10% of the overall fund, and timber, at 5%.
The board asked investment consultant Dahab Associates to complete a study to determine how to split the additional 5%; Dahab will present the study to the board at its May 16 meeting, along with recommendations on whether to distribute the additional allocation to existing managers or conduct a search for additional managers.
Funding will come from a reduction in the pension fund's fixed-income target to 15% from 20%. Specifics regarding the reduction have yet to be determined.
Separately, the pension fund rehired timber manager Forest Investment Associates to run about $80 million. An RFP was issued in January to comply with state law that external manager services be put out to bid every five years. There were no other finalists.