UNITED STATES - New Jersey Division of Investment is looking at placing $350m (€232m) into non-core real estate investments through commitments to six commingled funds.

Two of the commingled funds represent new strategies by real estate managers but officials considered fresh ideas at its February 21, supported real estate consultant, The Townsend Group.

One of those new ideas is a $50m commitment to the Apollo Domestic Emerging Markets fund - a $500m-$525m urban fund sponsored by Apollo Real Estate Advisors which is being driven by partner James Simmons as he was hired by Apollo in 2003 to develop and head the platform.

His previous experience dealing was as former CIO/interim CEO of the Upper Manhattan Empowerment Zone, which was responsible for most of the revitalization of Harlem and surrounding communities in New York.

So this new value-added fund is being developed to acquire urban properties considered to have constrained cash flows as a result of governmental regulation, capital neglect, product obsolescence and/or long-term below market leases at below replacement cost, to bring them to market standards.

Assets will be investing in US markets experiencing resurgence in their urban areas, including New York, New Jersey, Boston, Los Angeles, San Francisco-Oakland-San Jose, Washington/Baltimore, Philadelphia, Boston and Detroit.

 Investors in the fund are projected to achieve 14-18% gross IRRs over an anticipated holding period of 7-10 years.

New Jersey is also pondering a $25m commitment to the $350m Walton Street Mexico fund I - Walton Street Capital's first dedicated fund for investing in Mexico and Latin America.

The firm does have experience of investing in this part of the world as its last two opportunity funds had a 10% exposure to Latin America and formed Walton Street Capital Mexico, based in Mexico City, in 2006 so there are five acquisition and asset management personnel dedicated to the commingled fund.

Projected return for investors in Mexico Fund I are a gross IRR of 25% and the investment strategy calls for 40% of the fund to be in for-sale residential, while a further 20% will be placed in retail, 20% in hospitality and the other 20% in a mixture of office, industrial, mixed-use and land.

Investments in Mexico will make up for 75% of the fund's allocation as other potential markets under consideration are Brazil, Argentina, Chile and Columbia.

New Jersey may also make possible commitments of $100m to Westbrook Real Estate Fund VIII, along with $100m to Lehman Brothers Real Estate Partners III, $50m to PLA Residential Fund III and $25m to Walton Street Real Estate Fund VI.

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