New Mexico State Investment Council has approved a new $50m commitment to the Lion Industrial Trust, a fund managed by Clarion Partners.
It is more than double the size of the initial commitment it made to the core-plus industrial fund in 2012.
Geraldine Barlow, director of real estate and real return for New Mexico, said: “We have been pleased with the investment performance we have achieved since our initial $35m commitment into the fund in April of 2012.
“We didn’t think it was necessary to seek out another industrial manager. This also follows our long-range plan to have fewer and deeper relationships with managers.”
Before approving the new commitment, New Mexico State was under-allocated to industrial assets versus its benchmark, the NFI-ODCE Index.
In the first quarter of 2014, the Lion Industrial Trust had a $300m deposit queue. It is estimated that $75m of this capital will be called on a quarterly basis.
“We are expecting that our commitment will be called by the manager sometime during 2015,” said Barlow.
The fund had a gross asset value of $4.8bn, as of the first quarter of 2014.
It invests in industrial properties in the US, including the existing core assets and a build-to-core projects. More than 90% of the fund is invested in bulk distribution and warehouse assets.
Los Angeles Fire & Police Pensions has approved two $50m commitments to the Unico Partners I and Savanna Real Estate Fund III, respectively.
Both funds pursue value-add office investment strategies. Unico focuses on Seattle, Denver and Portland. Savanna concentrates on New York.
According to board meeting documents by consultant The Townsend Group, the pension fund believes it is a good point in the market cycle to be investing in value-add office assets.
Both funds have been seeded with property assets to provide investors with some immediate income. Approximately a quarter of the Unico I fund assets have already been seeded, having been acquired over the past 12 months.
Savannah has already bought two assets for its fund and has a third asset under contract.
Unico I is the first fund launched by Unico Partners. The manager has raised $170m and is aiming to reach $250m. Townsend stated in the board meeting document that it would be likely that Los Angeles Fire & Police’s commitment would be reduced.
The Teachers’ Retirement System of the State of Illinois and the New Mexico Educational Retirement Board have upped their allocations to real estate.
Illinois Teachers increased its exposure from 14% to 15%, and New Mexico Educational shifted its quote from 5% to 7%.
The new allocation for Illinois Teachers could lead to the pension fund investing as much as $500m (€365m) in real estate in the future, based on the current allocation and the total size of the institutional investor.
The pension fund declined to comment on the figure at this time. It told IP Real Estate that the implementation of any asset allocation programme can typically take several years. As such, exact allocation and/or funding amounts are subject to change.
Illinois Teachers will be considering a variety of investment strategies and structures with the new capital. It said it would continue to explore a number of strategies, including domestic and international investments, and core, value-added and opportunistic assets.
The investment structures could be a mixture of commingled funds, separate accounts and co-investments.
Illinois Teachers had a real estate portfolio valued at $5.6bn at the end of April.
New Mexico Educational has completed its first asset allocation review in two years. Based on the current size and makeup of the pension fund, the new allocation could lead to it investing around $220m in real estate in the future.
Bob Jacksha, chief investment officer for New Mexico, told IP Real Estate that it would be investing the capital for the new allocation over the coming years. “We have not addressed the implementation of the new asset allocation,” he said.
The pension fund for the most part has been an investor in commingled funds over the past several years, both domestically and internationally.
The most recent allocation study was completed by the pension fund’s investment consultant, NEPC. The institutional investor now has total plan assets of $11bn.
Its most recent investment in real estate was a $25m commitment to the Kildare European Partners I fund in April.
- American Investors
- Asset Allocation
- Capital Raising
- Clarion Partners
- Closed-ended funds
- Investment Strategies
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- Los Angeles Fire & Police
- New Mexico Educational Retirement Board
- New Mexico State Investment Council
- Pension Funds
- Real Estate
- Teachers’ Retirement System of the State of Illinois
- US Investors