UNITED STATES - Indiana Public Employees' Retirement Fund has approved two investments in real estate debt totalling $230m (€169.9m).

Up to $150m will be invested in the Prima Mortgage Investment Trust: an open-ended commingled fund investing in US real estate debt.

According to pension fund officials, there is room for investing in debt within its real estate allocation, in part because there is the potential for good risk-adjusted returns.  Indiana PERF is expecting to achieve a 6% real return, net of fees, for all of its real estate investments.

The Mortgage Investment Trust invests in the origination and management of high-quality commercial mortgage whole loans, but some of its capital will also be placed in the CMBS market.

At the same time, Indiana PERF has also made an $80m allocation to the Walton Street Real Estate Fund V Loan Facility.

The pension fund has worked with Walton Street Capital before as it invested $75m in the Walton Street Real Estate Fund VI in June 2008.

This latest loan facility is a follow-on fund to Real Estate Fund V, an opportunistic fund which raised $1.6bn and closed to new assets in June 2006.

Another of the investors in that commingled fund was the Ohio Police and Fire Pension Fund.  It had made a $25m investment in the fund at the time but placed a value of just $5.97m on this investment at the end of January 2010.

Topics