New York State Teachers’ Retirement System has committed $154m (€111m) to Blackstone – the scheme’s first to the fund manager in Europe.
The commitment to Blackstone’s Real Estate Partners Europe IV fund was made with the view that the real estate markets in Europe are similar to those of the US four years ago, with distressed real estate and attractive opportunistic returns. A projected $800bn of European property loans is maturing over the next five years, which could lead to debt investments and restructuring opportunities.
New York has previously invested in Blackstone’s V, VI and VII global opportunity funds as well an Asia investment fund and a debt fund. Its investments in Blackstone as of year-end 2013 totalled $321m.
Europe IV has raised $5.1bn to be invested in equity and debt in complicated real estate transactions in the UK and central Europe.
The pension fund has also approved a $50m allocation to a US opportunity fund managed by Artemis. New York said it had approved the commitment to Artemis Real Estate Partners Fund II having been encouraged by the performance of Real Estate Partners Fund I, made in 2011.
Fund II invests in debt and equity across the apartment, industrial, office, healthcare and retail sectors.
The pension fund’s investment in Fund I was valued at $32m at the end of last year, with annualised returns of 18.7% and 20.5% since inception.