NORTH AMERICA – The Texas Permanent School Fund has approved new real estate commitments totalling $225m (€170.5m).
The capital will be invested in three commingled funds: the UBS Trumbull Property Fund ($100m), the DRA Growth & Income Fund VIII ($75m) and the GTIS US Residential Strategies Fund ($50m).
The $13.8bn UBS Trumbull is a core, open-ended fund managed by UBS Realty Investors.
The real estate manager looks to achieve a 5% real return on its investments.
The existing portfolio for the fund has earned an 11.2% net IRR for the one-year investment period.
UBS Trumbull has a $2.5bn entry queue, the largest of any manager in the open-ended core sector.
It will be at least five quarters before the manager calls any new commitments for the fund.
UBS invests at least 85% of the Trumbull fund in traditional core assets and 5-15% in value-add deals that involve both higher risk and higher returns.
The leverage component of the fund is 13.1%.
DRA Advisors is the manager of Growth & Income Fund VIII, a value-added commingled fund that will only be investing in the US.
The investment focus will be either existing properties or distressed debt secured by real estate.
The deals will involve the four main property types of office, industrial, retail and apartments in selected markets around the country.
The US Residential Strategies Fund, managed by GTIS Partners, is projected to be a commingled fund with a total capital raise in the neighbourhood of $400m-500m.
One part of the investment strategy is to buy land and prepare it to sell to homebuilders.
It also will be buying existing single-family homes for a home rental strategy.
The fund will be investing in a variety of markets around the country, including Atlanta, Las Vegas, Miami, Tampa and Arizona.
Texas Permanent made the commitments as part of $460m of real estate commitments planned for calendar year 2013.
Approximately $250m has been set aside for core, $110m for value-added and $100m for opportunistic.
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