UNITED STATES- Teachers' Retirement System of Louisiana has placed $125m (€80.2m) into new real estate investments, as part of its unique view of real estate investing.
At least $75m is being invested in the Crow Holdings Realty Partners Fund V and $50m into Walton Street Real Estate Fund VI.
But Louisiana Teachers has a unique way of investing in real estate, as chief investment officer Bob Leggett explains: "We have no direct targeted allocation for real estate. Instead, real estate is included in the real asset category. This asset class has an allocation of 9%."
The pension fund is now trying to figure out the amount it wants to consider in the real assets category for real estate, according to Leggett.
"This is something that we are discussing with our consultant, Hamilton Lane. We would hope to have this determined over the next few months."
Realty Partners Fund V is a commingled fund managed by Dallas-based Crow Holdings, a firm typically making a co-investment of around 22% of the total capital raised for each of its commingled funds.
This commingled fund only looks for transactions in the United States but it does have a diversified strategy by risk profile, property type and location and is considering investing in apartments, shopping centres, industrial, office and hotels.
Walton Street Capital is also raising $3bn of equity for its Real Estate Fund VI via a true opportunity fund designed to place capital in direct properties and make entity-level investments in real estate operating companies.
Most of those investments will be made in the US but a small amount of capital will be placed in Mexico and India.
Investors in Real Estate Fund VI are projected to achieve a net IRR of 18% and an equity multiple of 2x, while Walton Street Capital is making a $50m co-investment to the commingled fund.
Louisiana Teachers had total plan assets of $15.2bn at the end of March 2008.