UK - Barnet Council pension scheme is set to liquidate its £23m ($37.4m) real estate portfolio after integrating the fund's property strategy into a diversified growth fund.
The portfolio - which accounts for 4% of Barnet's fund assets, worth £22.98m - has holdings in the Schroder Exempt Property Unit Trust, Hermes Property Unit Trust, Rockspring Hanover Property Unit Trust, and BlackRock UK Property Fund.
JLT Investment Consulting - advisers to the scheme - said the property portfolio's diversifying effects had been superseded by the fund's diversified growth investments, which includes property allocations.
The report said: "We do not believe there is any compelling reason as to why the fund should have a separate, internally managed property portfolio.
"While this is not a historically optimal time to exit property portfolios we would recommend that the pension committee does not attempt to ‘market-time' the exit - the potential upside is marginal and the downside risk of underperformance is much larger."
The scheme has £5.9m with Schroders, £8.7m with Hermes, £2.4m with Rockspring Hanover and £6m with BlackRock.
JLT added the relatively insignificant size of its holdings and the amount of officer time it took to monitor meant it made sense to liquidate the portfolio.
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