The Contra Costa County Employees’ Retirement Association (CCCERA) has approved $240m (€192m) of new fund commitments.

The fund made commitments of $75m to Torchlight’s Debt Opportunity Fund V, alongside two $65m allocations to Angelo Gordon’s Realty Fund IX and Oaktree’s Real Estate Opportunities Fund VII and a $35m commitment to Invesco’s US Value-Add Fund IV.

Torchlight is looking to raise $1bn for the fund, which will be focused on the commercial mortgage-backed securities (CMBS) market and target a net 13-15% IRR.

CCCERA CIO Timothy Price and investment analyst Chih-chi Chu said CMBS issuance volumes had recovered since 2009 but only to a fraction of past levels.

With bank funding for non-standard real estate loans scarce, new issuance is limited. 

As of June, issuance totalled $40bn, compared with a peak of almost $240bn, according to data from the Commercial Real Estate Financial Council.

The large amount of looming commercial real estate loans due for maturity over the next few years was also a reason for CCCERA to allocate to Torchlight’s debt strategy, with opportunities created out of mispriced and distressed securities.

Angelo Gordon’s IX opportunity fund typically buys distressed and/or under-performing assets from owners that lack the capital or expertise to improve the assets, grow cash flows or create value.

The vast majority of the transactions for the fund will be in the US, with a 25% allowance for deals in Europe or Asia.

Oaktree is looking to raise $3.5bn for Fund VII, to which it will commit $20m, or 2.5% of total commitments.

The fund is looking to invest in distressed real estate assets in the US and Europe.

CCCERA said borrower recapitalisation was one strategy for the fund, particularly in the UK.

The strategy may result in a greater percentage of non-US investments – though still operating within similar non-US allowances as those of previous Oaktree funds.

Invesco Real Estate is seeking a $500m capital raise for Fund IV.

The manager will make a $10m co-investment in the fund, which has a targeted 13-15% gross IRR and 9% preferred return.

The manager will invest in broken core assets in primary markets and inefficiently priced commodity assets in non-core US markets, across all major property sectors.

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