UNITED STATES - California State Teachers Retirement System and ING Clarion Partners have created a value-added investment joint venture called INGCal Tactical.
CalSTRS and ING Clarion have had an ongoing relationship since 1998 but this is the first time that the relationship has gone to a value-added strategy, following a recommendation from its independent real estate fiduciary, Bard Consulting.
A total of $306m (€208.6m) of equity has been placed in the venture as CalSTRS supplied 98% or $300m and ING Clarion 2% or $6m. Ownership interests for any assets in the JV will follow along the same lines as the equity contributions.
Steve Latimer, the CalSTRS portfolio manager for ING Clarion said: "We have shifted our strategy with the pension fund from core to more of a value-added or opportunistic play. The thinking is that there will be more investment opportunities for us in this area going forward, given where the market is and where it's headed."
Total capitalization on the venture will be around $918m as the venture will employ leverage of around 67%.
Just one asset has been seeded to the JV so far - an office building in Springfield, Virginia which has a development component to the property giving the entire constructed project total space of 55,7418m2.
ING Clarion will be looking for US deals producing value-added returns of mid teens mean leveraged IRRs on a normal holding period of two to three years.
Most acquisitions will involve office buildings but some deals could include the three other main property types, along with mixed-use projects and specialized property types such as self-storage and hotels.