REAL ESTATE- The California Public Employees Retirement System has made a $100m commitment to the American Value Partners Fund I.
This is a commingled fund that has a very unique investment strategy. It will be investing with either emerging real estate managers or in investment opportunities that don’t receive a lot of institutional capital.
Emerging managers could be defined as companies that are either new to attracting pension fund capital or are newly created companies where the principals have left an experienced manager and formed a new company.
The investment strategy would be one that is not attracting a great deal of investment capital. It could involve buying existing assets or one that has a value added or opportunistic approach.
The property types that are involved hear could be many. Some of the investments made by American Value Partners Fund I would be the four main property types of office, industrial, retail and apartments.
There is also a chance that the commingled fund will be investing in specialized property types. Among those to be considered are hotels, student housing or senior housing. The assets that it owns would be spread out across the United States in many markets.
In some cases, American Value Partners Fund I will be placing small amounts of capital into investment funds that are trying to raise $40-60m for a specific investment fund.
CalPERS recently made its commitment to the commingled fund. The pension fund’s Portfolio Manager Randy Pottle worked on the commitment. The pension fund projects that it will achieve a 13% to 15% net IRR return on its investment.
The fund manager for American Value Partners Fund I is AVP Advisors based in Newport Beach, Calif. The company is still raising capital for the fund. There is a possibility that the fund will have a final closing by year-end.
The commingled fund has attracted some other institutional investors to the fund. California State Teachers Retirement System has made a $100m commitment to the fund. There is another unnamed institutional investor that has contributed $200m.
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