REAL ESTATE- The New Jersey Division of Investment has committed a $75m investment into both the CPI Capital Partners Europe and to Walton Street Real Estate Fund V.
The CPI Capital Partners Europe fund will be the pension fund’s initial investment overseas. The investment staff believes this will allow it to achieve diversification by investing in different countries and economies.
The fund manager on this limited partnership is Citigroup Property Investors. The current size of the fund is $1.2bn. There is an anticipated closing on the fund by June. Citigroup has agreed to co-invest $240m or 20% of the total raise for the fund.
It’s projected that investors will achieve a 18% net IRR. The commingled fund has an 8-year term with two one-year extensions.
The commingled fund has several diverse investment strategies. These include large-scale real estate transfers, complex single asset investments, entity level transactions and capital market opportunities.
Western Europe is the main focus for the fund. Around 50% of the deals will be in Germany. Other targeted countries include Czech Republic, Poland and Hungary.
Walton Street Fund V is much more of a US fund. Only 10% of the transactions will be in Europe. The commingled fund is about to have a final closing. The total raise should be around $1.5bn. One of its more recent investors to join New Jersey with a $30m commitment was the Illinois State Board of Investment.
Walton Street Capital is the fund manager on this commingled fund. It will place $45m of its own capital into the commingled fund. It will invest in a variety of property types including office buildings and hotels.
The investment strategy will include buying single assets and portfolios. There will also be some international joint ventures, targeted developments and complex ownership situations.
Investors in Walton Street Fund V are projected to achieve a gross IRR of 23%. The commingled fund has a five-year term. There is a four-year investment period to find all of the transactions for the fund.
