REAL ESTATE - The California State Teachers Retirement System (CalSTERS) has made a $350m commitment to the Beacon Capital Strategic Partners IV fund.
The pension fund regards this commitment as a follow-up investment. It has invested in two previous Beacon funds: $75m into Beacon Capital Partners III (May 2004) and $50m into Beacon Capital Partners II (June 2002).
Portfolio manager Michael Thompson said: “We’ve had a good experience with Beacon funds II and III. Beacon’s performance is very strong and when they came out with fund IV we were interested.”
Beacon is trying to raise $1.75bn for Strategic Partners IV. Another investor in the fund - with a $40m commitment - is the San Bernardino County Employees Retirement Association.
The manager will put $25m into the fund as a co-investment. The projection is for investors to achieve an 18% to 20% gross IRR (15% to 18% net).
Strategic Partners IV will target direct equity investments in office buildings in major markets. The assets will have some value-added components such as repositioning or re-leasing.
The majority of the acquisitions will involve properties with parameters such as knowledge-based economies, constraints on new development, urban markets with greater liquidity and good long-term fundamentals.
Beacon will look for assets in the US and internationally although the latter allocation must not exceed 20%. Some of the markets in the US will be Boston, New York City and Los Angeles.
