UNITED STATES - Public School Teachers' Pension and Retirement Fund of Chicago has extended its international real estate exposure by agreeing to allocate $40m (€25.7m) to the Merrill Lynch Asia real estate opportunity fund.
Assisted by its real estate consultant, The Townsend Group, the board decided at a March 13 meeting it likes Merrill's track record for investing capital in the Pan Asia markets, and sought to take advantage of it.
The Merrill Lynch global commercial real estate group has been investing its own capital in the Pan-Asian markets for several years but the company is attempting to raise $2bn in capital via third-party institutional investors.
A $3bn cap has been placed on the opportunity commingled fund but investors are expected to achieve net IRR of 20% as assets will be invested in a variety of direct properties in the region, including in Japan, China and India.
Four main property types of office, industrial, retail and apartments are expected to be the main focus although there will be some investments made in specialist property types, such as single-family units and the development of business-oriented hotels.
Its commitment to the Merrill Lynch fund is part of the $85m Chicago Teachers wants to invest in international real estate in 2008, and this is part of its long-term goal to grow its international real estate holding from 3% to 15% over the next several years by investing capital in commingled funds.