Blue Owl Capital is planning to raise $6.5bn (€5.9bn) for its latest net-lease fund, which will focus on assets in the US and Canada, according to Vermont Pension Investment Committee, one of the fund’s investors.
Vermont Pension disclosed in a board meeting document that it has approved a $50m commitment to Blue Owl Capital Real Estate Fund VII. The investment is expected to enhance diversification within the pension fund’s core real estate portfolio.
Vermont Pension’s other holding in the core real estate sector is a $167m investment in the UBS Trumbull Property Fund.
The pension fund said diversified core funds have faced challenges since the pandemic due to shifts in consumer behaviour towards online commerce and remote work.
Fund VII is mainly expected to invest in industrial assets, with a smaller portion allocated to office and retail properties. Blue Owl Capital will be buying assets that are on a long-term lease of 15 years with a minimum requirement of 11 years at the time of the purchase.
According to Vermont Pension, the commitment to Blue Owl Capital is part of a $100m allocation for new core real estate investments. This allocation is part of the pension fund’s strategy to hedge against inflation, which also involves investments in infrastructure, farmland and treasury inflation-protected securities.
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