NORTH AMERICA - The California State Teachers Retirement System (CalSTRS) has made real estate commitments for the second quarter totalling nearly $1.2bn (€931m), with the vast majority of the capital - 78.5% - being channelled into core strategies.
The pension fund stated in its activity summary on its website that the investment staff continued to overweight core strategies and manage risk "aggressively" to drive the portfolio within policy guidelines.
Through June, the scheme had 35% of its existing portfolio in a core strategy. The minimum and maximum allowed for the sector is 40% and 62%, respectively.
The largest of its new commitments was for the LCOR/Cal Associates joint venture, in which it invested nearly $470m.
The manager is GI Partners, which put in the remaining $19.5m of equity.
These equity contributions mean the pension fund holds a 96% ownership of the assets and GI 4%.
The investment strategy targets apartments in the Washington, DC to New York City corridor.
The existing assets to be acquired will be properties that can be stabilised to generate current income and long-term appreciation.
There will be some developments completed for the partnership as well.
Ricardo Duran, media relations at CalSTRS, said the investment should allow the pension fund to increase its core holdings in apartments.
The deal also includes urban infill opportunities and a development pipeline for quality real estate assets at attractive yields in the region, he said.
CalSTRS expects a 7-9% return, before fees.
The pension fund also put in $200m into the existing CenterCal joint venture.
The new capital will continue to focus on a build-to-core/acquisition strategy that targets high-quality retail centres on the West Coast.
As a core investment, the pension fund seeks returns of 7-9% before fees have been paid for CenterCal.
The retail investments for the JV will cover a wide range of shopping centres, from grocery-anchored properties to regional malls.
CalSTRS made three other commitments during the second quarter.
One was for $250m into the Datacore Fund, a $1bn commingled fund managed by GI Partners that will invest in core, income-producing, technologically advantaged real estate.
The pension fund also approved two opportunistic investments. One was $200m into FCO MA III for credit-related investments, while the other was $50m into PCCP Equity IV for distressed debt and assets, with the intent of acquiring underlying assets and repositioning them.
CalSTRS has a real estate portfolio valued at $21.8bn, through the end of July, representing more than 14% of its $150.6bn in total plan assets.