Massive Ohio pension fund steps up investment in infrastructure

Ohio’s school cafeteria workers, principals, and school bus drivers are bullish on infrastructure investment. Real estate, not so much.

The Columbus-based School Employees Retirement System of Ohio pension fund pans to invest $100 million in the 2019-2020 fiscal year and all of that will go toward infrastructure, according to IPE Real Assets.

Over the next 12 months the $14.3 billion pension fund plans to increase the share of infrastructure investments in its real assets portfolio from 17 to 21 percent. The rest of that portfolio is made up of real estate investments.

Ohio SERS membership is open to people working in education apart from teachers, including school administrators, teaching assistants, and bus drivers. The fund has over 239,000 members.

Ohio SERS has been moving capital from real estate to infrastructure over the last three years. A recent report by the pension fund’s board says it expects infrastructure investments to generate 8 to 10 percent returns.

Pension funds are constantly tweaking their portfolios. In April, the Los Angeles County Employees Retirement Association announced it would shed $1 billion in real estate as part of a restructuring of its portfolio.

The pension fund will maintain its current mix of real estate investments, which is heavier on industrial and specialty types like student and senior housing and light on office and retail, according to IPE. [IPE Real Assets] – Dennis Lynch