Teachers’ Retirement System of Louisiana is planning to invest in US and European real estate debt funds as part of its 12-month investment strategy.
The pension fund plans to commit up to $175m (€158m) to new real estate funds during its 2016 fiscal year, according to board meeting documents.
It will target funds that can take advantage of over-leveraged situations involving mature loans that were originated at the peak of the market during 2004-07.
Louisiana Teachers will also look at core, value-add and opportunistic real estate strategies.
It is interested in finding managers with proven expertise in complex situations and distressed opportunities, and strategies that are likely to succeed over the long term and perform well in a slow growth economy.
Louisiana Teachers has made one new real estate commitment, allocating $50m to Rockpoint Group’s latest opportunistic fund.
The fund manager is seeking to raise $2.5bn for Rockpoint Real Estate Fund V. A number of pension funds have already joined the fund, including the Teachers’ Retirement System of the State of Illinois.
The fund will focus on urban in-fill locations in markets like New York, Boston, Washington DC and San Francisco.
It will seek to buy offices, hotels and residential assets at discount to replacement cost and enter into developments and redevelopments and invest in distressed situations.
According to Louisiana Teachers, the fund will have a sidecar facility that could enable another $1bn of capital to be raised. The structure could lead the manager to consider moving beyond its middle-market strategy to include larger assets.