California State Teachers’ Retirement System (CalSTRS) has gained a controlling stake in a US residential platform from Brookfield Asset Management.
The $229bn pension fund said it has acquired a majority interest in Fairfield Residential Company for an undisclosed sum.
Fairfield was majority-owned by Brookfield and minority-owned by CalSTRS.
CalSTRS said following the latest transaction, Brookfield retained its interest in the investment manager of Fairfield’s affiliated real estate funds.
Recently CalSTRS adopted what it called a “Collaborative Model” for investments across all asset classes in its portfolio.
The CalSTRS Collaborative Model creates long-term relationships between CalSTRS and other long-term investors to create efficient investment vehicles that produce attractive sources of return by effectively using the strengths of each investor.
CalSTRS said this transaction [Fairfield] was possible because of the flexibility built into CalSTRS Collaborative Model.
CalSTRS director of real estate Mike DiRé, said: “The result is our ability to align the real estate portfolio with a top-tier manager and long-time CalSTRS real estate partner.
“Transitioning to majority owner was appealing for a number of reasons, including the expansion of Fairfield’s geographic footprint and the growth of its capital base to include other like-minded investors.”
CalSTRS has been a partner of Fairfield’s since 1997 and a minority owner since 2005. Currently, the pension fund has over $2bn committed with the company in develop-to-core, value-add, and affordable housing strategies.
Associate portfolio manager Josh Kawaii-Bogue, said: “As a majority owner, CalSTRS will be able to create better investment cost efficiencies and enhance its investment execution efforts in the coming years.”
Deputy CIO Officer Scott Chan, said: “CalSTRS will continue to partner with best in class managers and operators as it seeks to create better alignment and reduce costs across its real estate portfolio.”
Fairfield CEO Greg Pinkalla, said: “Fairfield looks forward to building on our 20-year relationship with CalSTRS as we continue to originate and execute varied investment strategies in the multifamily space.”