The University of Texas Investment Management Company (UTIMCO) is looking to European real estate, having approved two commitments to European funds totalling $168m (€121.6m).
UTIMCO made respective $100m and $68.8m commitments to Blackstone Real Estate Partners’s Europe IV fund and Activum SG’s Feeder Fund III.
Blackstone’s Europe IV fund – the largest dedicated real estate opportunity fund in Europe at $5.1bn – will invest in the UK and central Europe.
The fund will invest in both equity and debt, through equity investments in restructuring/recapitalisation, dispositions by motivated sellers and bankruptcy situations, as well as public-to-private deals.
UTIMCO’s commitment to Activum’s opportunity fund represents 18% of the total capital raise for the fund, which is focused on Germany. Activum had a final closing on this fund last month with a total capital raise of €380m, exceeding the original €325m target for the fund.
The fund will create a portfolio of offices in need of repositioning and Berlin residential. Although German-focused, the fund may also invest outside of Germany.
UTIMCO has also made a $100m allocation to the Wheelock Street Real Estate Fund II. The commitment to the opportunity fund covers 16% of the $625m capital raise planned by Wheelock Street Capital.
San Diego City Employees’ Retirement System is planning to make a $50m commitment to LaSalle Investment Management’s Asia Opportunity Fund IV.
Most of the fund’s investments will be in Japan, Australia and China. LaSalle is targeting both debt and equity investments in the office, retail, residential, warehouse/logistics and hotel sectors. The fund, for which LaSalle is looking to raise $500m, will finance the development, reposition and renovation of properties.
Partners in the fund are projected to achieve 18% net IRR. LaSalle is making a $50m co-investment in the fund, which is leverage at 65%.
Hewitt EnnisKnupp, which is advising San Diego, said that Asia offers attractive fundamentals for real estate investment, with a lack of “risk” capital in the market. There is more interest, it added, in capital for core real estate.
Ohio Police & Fire Pension Fund has made an additional $35m allocation to US timberland group Forest Investment Associates. The latest commitment to Forest Investment follows a $100m allocation in 2012, with $78.6m of the capital invested so far. Since inception and as of year-end 2013, the gross nominal IRR on the portfolio is 7.02%.
Ohio is planning to invest $125m in real estate funds for the rest of this year through a non-core strategy.
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