In an interview with Markets Group, the CIO
of State of Maryland Retirement and Pension System,
Andrew Palmer spoke about allocating $400 million this year to stay on the path
to reach their infrastructure target by 2026. Allocations to real estate
managers are expected to be muted while above target and the real estate market
is slow.
In recent times, global
political distress and fluctuating interest rates have shaken up most
allocator’s portfolio and the $64 billion pension system are no different.
The CIO plans to
allocate at least $300 million to core infrastructure managers and $100 million
to other strategies with a focus on middle markets, data centers and energy
transition
Other strategies that
the portfolio invests within the real estate sleeve include value-added,
opportunistic and REITs.
“For infrastructure, we
are still building out core, middle market and spokes so expect to deploy in
all of them over the intermediate term,” said Palmer.
The system allocates 15% or $9.5 billion to their real
assets sleeve against a target of 15%, as of September 30. The target ranges
between 11% and 19%.
The real estate sits at 11% or $6.8 billion against a
transitional target of 11% or $6.8 billion, as of September 30.
The real assets sleeve includes real estate, commodities,
natural resources, and infrastructure.
The real estate fund roster includes Ares Industrial Real Estate Fund and Lone Star Real Estate Fund VI
among others.
Through their infrastructure portfolio, the CIO confirmed
each ticket size as $100 million.
Maryland is also set
to launch a consultant search to evaluate whether it is possible and profitable
for the system to target dollars to in-state investments by examining the size
of the private markets in Maryland and the risk and return experience of those
investments.
