The Texas Municipal Retirement System has given the green light to a $775 million allocation to infrastructure assets and Real Estate Investment Trusts.
The $25 billion pension fund committed $375 million to Nuveen Asset Management and $400 million to Cohen & Steers Capital Management, two firms TMRS has previously worked with. It committed $350 million to both Nuveen and Cohen & Steers last December.
Nuveen, an investment firm with $230 billion in assets under management, will invest $375 million in a mix of REITs and infrastructure assets. The infrastructure commitment will be for US and foreign investments and include existing infrastructure projects, debt and preferred equity. Capital allocated for REITs will be invested in global REITs for preferred equity and debt.
Infrastructure investments represent 61 percent of Nuveen’s real asset income and REIT investments make up 39 percent.
“The Nuveen strategy focuses on investments backed by tangible, long-term assets that demonstrate consistent cash flow streams due to long term contracts, concessions and other essential functions and services provided,” the board meeting document stated.
The $400 million allocation for Cohen & Steers will follow the manager’s multi-asset class strategy. The capital will be used to invest on a global basis in REITs, infrastructure and natural resources. TMRS said the strategy is focused on asset allocation and bottom-up security selection as a means to outperform markets in periods where both stock and bonds are underperforming historical averages.
Infrastructure represents 16 percent of Cohen & Steers’ real assets strategy and global REIT investments represent 28 percent.