REAL ESTATE - The New Jersey Division of Investment has allocated $1.6bn (€1.3bn) to be invested in real estate over the next two years – that’s $675m in fiscal 2006 and $900m in the next year.
This allocation comes from an allocation that was established last year. The pension fund has set a 12% allocation for alternative investments. This will be split into real estate, private equity and hedge funds.
The real estate component of this is a 4% allocation. It hopes to get to this allocation over the next five to seven years.
The pension fund will be working through this allocation with its real estate consultant, Cleveland-based The Townsend Group. Overseeing this account is Consultant Scott Booth.
Before last year, the New Jersey Division of Investment had no real estate holdings. Its total assets are now $73bn. At the time it was one of the largest pension funds in the country with zero real estate in its portfolio.
Spokesman Tom Vincz said: “Our goals for investing in real estate is to increase returns for the total portfolio and to mitigate risk by investing in some additional asset classes like real estate.”
The New Jersey Division of Investment has placed $350m into real estate so far. All of this activity has been through commingled fund activity. Down the road the investor could be doing some separate account searches.
The most recent activity was investing $200m into three commingled funds. One of these was a $75m investment in the Blackstone Real Estate Fund V. The same amount was invested in GMAC Commercial Realty Partners II. The other $50m was placed into the Guggenheim Structured Real Estate II.