UNITED STATES - California Public Employees Retirement System has approved a $250m (€171.1m) commitment into the Rockpoint Real Estate Fund III which is currently only holding investments in Japan.
CalPERS' portfolio manager Judy Alexander said having contributed $50m commitment to an earlier Rockpoint fund, the $239.5bn (€163bn) fund now expects to make 15% net IRR over a three-to seven-0year period, towards the opportunistic/international component of its $20bn (€13.6bn) real estate portfolio.
"We have had a prior relationship with the manager. One of the things that we like about Rockpoint is that they tend to acquire or invest in very complex transactions. These are the kinds of deals that many other real estate managers will not be going after. In many cases they don't get involved in competing with many other investors on deals," added Alexander.
CalPERS is aware Rockpoint is going to be making some investments in Real Estate Fund III in single-family land but officials say they are not concerned about this, even though the single-family housing is going through some difficult times.
Alexander said, "Rockpoint has been very successful in making investments in the single-family area in the past. We know that they are aware of what is happening with the property type now and they will take that into consideration for the future."
In its previous funds, ‘single-family' investments made up around 4-5% of the fund but Rockpoint has said it does not plan on making any investments in single-family assets for a while.
That said, Rockpoint will be investing in other property types like office buildings, hotels and apartments and a good portion of the fund will focus on income generating assets.
The only assets currently held within in the fund are in Japan but other international markets being considered for the fund's investment locations are the UK and Germany.
The real estate manager is expecting a final equity closing of over $1bn on Real Estate Fund III by year-end.
CalPERS recently announced it aimed to invest up to 50% of its real estate portfolio in international investments long-term.
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