UNITED STATES - California State Teachers Retirement System has bolstered its international real estate portfolio with commitments to three new investment entities totalling nearly $252m (€165.2m), including $100m in Nordic property.
The pension fund believes its three latest investments - in a mixture of developed and emerging markets - will bring higher returns than can be achieve in the United States.
One of its moves is a €100m commitment to the NIAM Nordic Fund IV, which invests in developed real estate markets such as like Norway, Sweden and Finland along with emerging countries such as Estonia and Latvia, to give pension funds a projected net IRR return of 15-16%.
Pension Consulting Alliance supported CalSTRS in this selection, but its independent fiduciary Courtland Partners has recommended a $50m commitment to the RGI Co Invest 2 entity.
This deal means CalSTRS will co-invest with the Redwood Grove International Fund, which is a $2bn international investment fund managed by Grove International Partners, to invest in a variety of developed markets and transactions, such as include direct investments in real estate companies, alongside the placement of capital in new development projects, turnaround situations, distressed loan portfolios and public to private deals.
At the same time, CalSTRS has also committed $50m to the IL & FS Realty Fund II - a $750m emerging market commingled fund focused on Indian real estate.
The goal of this commingled fund is to assemble a diverse portfolio of real estate investments which include existing assets, redevelopment opportunities and ‘ground-up' development projects.