The Idaho Endowment Fund Investment Board has selected UBS and Deutsche Bank as asset managers as it makes its first foray into real estate.
The US pension fund allocated $75m (鈧�66m) to the UBS Trumbull Property Income Fund and the same amount again to the Deutsche Bank RREEF America II.
As reported , Idaho has a preference for core, open-ended funds.
The UBS Property Income Fund, a US debt fund, provides new debt on core office, industrial, retail and apartment assets.
Total assets in the fund, which has an 8-9% target return, are in excess of $2bn.
RREEF America II mostly acquires US office, industrial, retail and apartments.
Idaho鈥檚 new target allocation for real estate is 5%, a result of a study by the fund鈥檚 general consultant Callan Associates in November last year.
Chris Halvorson, investment officer at Idaho, said: 鈥淏oth of these investments will give us some strong diversification benefits.
鈥淧rior to making these commitments, our investment portfolio was 70% equities, 30% fixed income. The commitments we made will get us to the 5% targeted allocation we established for real estate earlier this year.鈥�
He said the two managers had 鈥渧ery conservative鈥� investment strategies, 鈥渨hich we were comfortable with鈥�.
Not all of the capital will be called by the managers immediately, he said.
鈥淭he entry-queue situation was not a big deal for us,鈥� he added, 鈥渁s we were not planning to have all the capital called at once.鈥�
Idaho, which did not use a traditional RFP approach, also considered Morgan Stanley鈥檚 Prime Property Fund.
