Pension fund also creates new 4% allocation to global equity
New York State Teachers' Retirement System, Albany, will hire Cabot Properties and Penwood Real Estate Investment Management for separate accounts to invest in industrial properties, pending completion of due diligence.
The $118.9 billion pension fund's board approved the agreements Thursday at it quarterly meeting.
"There will not be specific dollar allocations to either and there are no set terms as to the length of the agreements," spokesman John Cardillo said in an email. "Potential deals will be considered on a case-by-case basis."
The system has had multiple dealing with Cabot and Penwood in the past but not in a separate account structure, he added. Separate accounts will enable the pension fund to retain "full investment discretion and all decision-making authority," he wrote.
"In terms of the assets themselves, all types of industrials will be considered, including development and redevelopment opportunities," he added.
The board also approved adding a global equity asset class with a target allocation of 4%. This asset class "offers a broader opportunity set to add value in the active portion of our portfolio," Mr. Cardillo wrote. Further information on how the asset class will be managed could not be learned by press time. As a result, the domestic equity and international equity allocation were cut by 2 percentage points each to 33% and 16%, respectively.
The board also approved one-year renewals for four investment managers:
- Wellington Management to manage $993 million in a global aggregate fixed-income mandate benchmarked to the Bloomberg Barclays Global Aggregate Float Adjusted Bond index hedged to the U.S. dollar, effective June 20.
- LSV Asset Management to manage $731 million as an international equity manager benchmarked to the MSCI ACWI ex-U.S. index, effective July 25.
- Adelante Capital Management to manage $333 million by actively investing in real estate investment trusts and real estate operating companies, effective July 1.
- Arrowstreet Capital to manage $325 million as an international equity manager benchmarked to the MSCI ACWI ex-U.S. index, effective July 18.