NORTH AMERICA – The Illinois Municipal Retirement Fund has approved commitments of as much as $225m (€173.5m) for its non-core commingled fund investment strategy.

The commitments approved were $25m to AEW Partners VII, $50m to Blackstone Real Estate Partners VII, $30m to CBRE Strategic Value Partners US 6, $25m to Dune Real Estate Partners III and $20m to LaSalle Income & Growth Fund VI.

It also committed $25m to Rockwood Capital Real Estate Partners IX, $20m to Starwood Distressed Opportunity Fund IX and $30m to Torchlight Debt Opportunity Fund IV.

Two of these commitments were considered to follow-on investments, as Illinois Municipal had previously invested with Rockwood Capital and Dune Capital Management.

John Krupa, senior communications specialist at the pension fund, wrote in an email that allocating commitments across multiple managers would further diversify Illinois Municipal’s non-core real estate programme, by both investment manager and strategy.

The commitments approved by the pension fund will go into commingled funds that have many different strategies. 

LaSalle for its Income & Growth fund series typically looks to buy existing properties that have the possibility of adding value in future. 

The AEW Partners Funds is an opportunity fund. Its strategy includes buying existing properties it can improve and the purchase of distressed debt where it can take control of the property in the future. 

Blackstone looks at many large and complex transactions for its commingled funds.

Illinois Municipal will fund the approved commitments from cash reserves and/or Northern Trust Index Funds.

Krupa had previously stated that Illinois Municipal considered ‘non-core’ real estate to be assets where the occupancy or leasing was at least 80%.

The amount committed to the commingled funds was more than twice the initial amount the pension fund was planning for when the non-core commingled fund search was first announced in July. 

The initial amount was at least $100m.

Illinois Municipal had started the non-core manager search with an RFP, conducted with assistance from the pension fund’s consultant, Callan Associates. 

There were a total of 65 managers that responded to the search. This group was narrowed down to a total of 12 finalists.

The pension fund has a 6% long-term targeted allocation for real estate. Through the end of September, it had 2.8% invested in the asset class. 

Illinois Municipal has $27.4bn in total plan assets.

Topics