Ohio SERS Adds Buyout Fund, Rejiggers Real Assets Portfolio

The Ohio School Employees’ Retirement System made an additional private equity commitment and dedicated significant attention to real asset strategies, according to its March meeting.

The $18 billion Columbus-based pension fund’s investment committee has granted approval for a $10 million commitment to Monomoy IV Waupaca Foundry (Project Titan), a buyout co-investment strategy inside the private equity sector. The investment was financed using available cash reserves.

In addition, the retirement system conducted a global evaluation of its real assets portfolio, resulting in the division of the program into separate real estate and infrastructure goals and benchmarks.

The target allocations for real estate and infrastructure are 13% and 7% respectively. The anticipation is that the implementation of the new framework and performance indicators would result in a decrease in fees when current obligations reach maturity and more co-investments are included in the portfolio.

The real estate sector, which suffered a -10.2% return in 2023, presently makes up $2.35 billion of the real assets program. This includes various types of properties such as industrial, multi-family, data centers, life science, student/senior/manufactured housing, medical office, single family rental, and storage. Office and retail properties each account for 12% and 5% of the total subset, respectively.

The real assets program allocates $1.8 billion to infrastructure, with a primary focus on transportation and energy. The investments are mostly in North America and Western Europe, with less exposure to Eastern Europe, Latin America, the Middle East, Asia, and the Pacific Rim. The plan yielded a return of 8.5% in 2023.