UNITED STATES - Fresno County Employees Retirement Association has changed its mind about the appointment of a real estate manager to look after a $30m (€21.7m) allocation for a value-added investment as it has reservations about the firm's ability to raise sufficient capital.
Back in March, the pension fund selected Buchanan Street Partners Fund VI for its value-added investment but Fresno County is now concerned about Buchanan Street Partners' ability to raise another $470m from other investors, according to Becky Vanyrk is the pension fund's assistant retirement administrator.
"We think that the real estate manager is not going to be able to reach its money raising target by the September 15 deadline that we have established. We think at this time it would be best to go in another direction," said Vanyrk.
TA Associates could now therefore be the beneficiary of a $30m allocation as it was the other finalist in the value-added search conducted by the pension fund in the sprin.g
Negotiations are still ongoing with the assistance of its consultant, Wurts Associates.
TA Associates is looking to raise $1.7bn of equity for its commingled fund and has already received commitments of $100m from New Jersey Division of Investment and $15m from Los Angeles City Employees Retirement System.
Its projected returns for investors is 15% net IRR by investing in US office, industrial, retail and residential assets along the east and west coasts as well as the MidWest, which are now considered to be at below replacement cost and might therefore be improved by better asset management and repositioning.
Fresno County had $2bn in assets as of the end of March, and invested $79.9m in real estate, equaling 3.96% of its 5% targets investment in real estate.