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Kalamazoo Considers Boosting Private REITs

The $473 million Kalamazoo (Mich.) Retirement System is considering shifting its entire real estate portfolio into private real estate investment trusts and is in the process of assessing global managers to present to the board at the next meeting Nov. 19. Kalamzoo’s real estate portfolio has an aggregate $23 million between the city and county plans. It is split 50/50 between public and private REITs. Private REITs have lower volatility and less correlation to the equity market than public REITs, said Board Chair Bob Salisbury.

Dimensional Fund Advisors manages the public REIT mandate, while RREEF manages private REITs. If the board decides to go along with the move, it will likely hire another manager in addition to RREEF to increase diversity and get exposure to global markets. DFA Spokeswoman Darla Hastings did not return calls. 

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