NORTH AMERICA - New Jersey Division of Investment has approved a total commitment of $150m (€120m) with Northwood Investors.
The capital is to be split, with $75m each being placed into Northwood Real Estate Partners Series III and Northwood Real Estate Co-Investors.
The first investment is an opportunity fund being raised by New York City-based Northwood Investors, while the second is a co-investment vehicle.
In a 24 May board meeting, New Jersey cited the winning companies' impressive track record and demonstrated investment discipline.
Northwood is led by John Kukral, a former chief executive and co-founder of Blackstone Real Estate Advisors.
He oversaw the company's real estate activity totalling $5.8bn across 160 separate transactions.
Northwood had raised $1.25bn of equity by 2008. This included $750m in the Real Estate Partners Series I Main Fund and $502m in the Co-Investment Fund.
The manager became an active player in 2010-11, when there were attractive investment opportunities and very little competition.
Northwood Real Estate Partners is currently an opportunity fund that will have a particular focus on major metropolitan areas of the US and super-regional markets in Europe.
Northwood Real Estate Partners has total assets of $2.3bn. The co-investment by the general partner is $85m, and there is a 6% hurdle rate for limited partners.
The amount of leverage placed on Northwood Real Estate Partners is much lower than many other opportunity funds.
The current total portfolio leverage for the fund is approximately 42% on a loan-to-value basis.
Many other opportunity funds have leverage in the range of 65-75%.
Northwood only uses leverage in specific instances where the manager believes the downside risk is limited.
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