The Massachusetts Pension Reserves Investment Management Board (Mass PRIM) has added a $100m (€88m) commitment to its relationship with DivcoWest Properties.
The pension fund backed the manager’s fifth fund, preferring to extend its relationship with DivcoWest over hiring a new manager.
“We engaged in a rigorous process at the beginning of the cycle of who to award capital to, and DivcoWest emerged at the top of the list,” the fund told IPE Real Estate.
“They have delivered on what we hoped for in our previous investments with them.”
DivcoWest is seeking $1.5bn for the fund, which will be leveraged at 65% and aim for a net IRR of 10-13%.
According to a Mass PRIM board-meeting document, Fund V is to invest in quality assets, with value-add characteristics in markets with strong economies, skilled workforces and substantial tenant bases that will benefit from continued economic expansion and job growth.
Its targeted markets include San Francisco, Seattle, Boston and Washington DC.
It will invest the whole of the capital in a mixture of office and R&D facilities.
Mass PRIM has now made $300m in investments with DivcoWest.
The relationship began in 2011 with a $50m commitment to the manager’s Fund III.
Other commitments include $100m to Fund IV in 2013 and a $50m co-investment in Fund III.
Mass PRIM has invested 73.4% of its $5.9bn real estate portfolio in core assets through separate accounts, with 7.2% of its portfolio in non-core assets, mainly through funds.
The balance of the portfolio is invested in REITs through separate accounts.