UNITED STATES - GI Partners has raised $1.9bn (€1.3bn) for its latest commingled fund, GI Partners Fund III, through a mixture of both new and existing pension fund capital, although the firm failed to meet its $2.5bn fundraising target.

Teacher Retirement System for the State of Illinois is a new investor, and made a $50m allocation into the commingled fund, after being impressed with the performance of GI Partners' two previous commingled funds, according to pension fund officials.

More specifically, GI were felt to have done a good job in seeking out distressed assets in both the US and the UK, and then making improvements which can then allow properties to be sold on.

The US assets included the purchase of technology-oriented real estate as well as senior housing, while some of the UK properties in the UK were pubs which were then turned into more family-friendly eateries.

Like Illinois Teacher, the Florida State Board of Administration has made a $100m commitment to this latest commingled fund but until now has contributed just $8.6m for a stake worth $6.6m by the end of June 2009.

Similarly, the California State Teachers Retirement System (CalSTRS) is one of the largest investors and made a $400m commitment to the fund in July 2008, although this commitment was issued before the pension fund decided earlier this year to write down the value of all of its real estate portfolio.

By March this year, CalSTRS had made a contribution to the fund totaling $17.9m and that is now valued as being worth $10.3m.

And California Public Employees Retirement System (CalPERS) made a $500m allocation to the commingled fund in September 2008, in the hope of achieving a net IRR of 20% on its investment.

As part of the process, GI made a $116.5m investment earlier this year in the FlatIron Crossing Mall in Broomfield, Colorado, in return for a 75% stake in the shopping centre.  The remaining 25% is still held by Macerich Company.

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