The Alaska Retirement Management Board (ARMB) has become one of the first investors to commit to the latest value-added real estate fund managed by Clarion Partners.
The US pension fund backed the Ventures 4 vehicle with $50m (€44.1m), for which Clarion is aiming to raise up to $500m, according to ARMB board meeting documents.
Clarion will be co-investing 2% of the fund’s commitments, or as much as $5m.
Ventures 4 is investing in US development, redevelopment and repositioning opportunities in for-rental and for-sale housing, hotels, industrial, retail and mixed-use assets.
Leverage will be between 65% and 70%, and returns are projected at 15% net.
ARMB has invested in three Clarion Development Venture series funds in the past, allocating $50m to Fund II in 2004 and $30m to Fund III in 2008.
Early successes in Fund II were offset by later-term losses as the cycle turned and the global financial crisis impacted the strategy.
Gross returns on the fund were -6.2%, according to industry sources.
Gary Bader, CIO at the pension fund, said Fund III’s results were expected to be “outstanding”, with a projected 16% return and 1.7x equity multiple.
Clarion Partners declined to comment.
The latest commitment by ARMB is in line with the pension fund’s 2015 real assets plan.
Its investment staff said it planned to explore value-add and opportunistic real estate funds.
ARMB also made a $50m allocation to its existing separate account with LaSalle Investment Management.
LaSalle is authorised to invest up to $276m for the core, separate-account relationship, investing in the US office, industrial, retail and apartment sectors.