NORTH AMERICA – The New Jersey Division of Investment is moving ahead with plans to make €275m worth of investments in European real estate.
One of these is a €75m investment into the Perella Weinberg Real Estate Fund II, an opportunity fund where the total equity raise is projected to be €1.5bn.
New Jersey wrote in a board meeting document that this commitment will fit in with the investor's goal to diversify geographically.
The pension fund currently has 6.6% of its real estate assets in Europe and is looking to increase this.
The limited partners in Fund II will be given an 11% preferred return.
Perella Weinberg Real Estate and managing partner Leon Bressler will contribute a combined €85m to the fund – a 5.6% co-investment percentage, which the pension fund feels compares favourably with most competitor commingled funds in the market.
The investment strategy will focus on real estate in core Europe, including operational repositionings, asset upgrades, leasing improvements and workouts.
New Jersey is also looking to commit €75m to M&G Real Estate Debt Fund II and €125m to M&G Real Estate Debt Fund III.
In a board-meeting document, the pension fund pointed to investment opportunities for real estate financing in Europe.
It also pointed out that real estate-related debt re-financings are set to begin this year with an estimated $250bn (€194bn) per annum for the next 4-5 years.
M&G Investment Management is seeking a total equity raise of €750m each for Debt Fund II and Debt Fund III.
The commingled funds have a separate investment strategy and targeted markets.
Fund II aims to originate and acquire a diversified portfolio of B-notes, mezzanine debt, preferred equity, CMBS and other real estate-related debt and debt-like instruments collateralised by commercial assets.
The primary focus is the UK and secondary Germany.
Fund III seeks to originate, hold, finance and dispose of senior tranche real estate debt capital to the UK and Western European commercial property market.