California State Teachers’ Retirement System (CalSTRS) has approved $200m (€169m) commitment each into real estate debt and US homebuilding joint ventures with Ares Management Corporation and GTIS Partners respectively.
The pension fund said the capital being put into the Cal Ares Real Estate Partners VII joint venture with Ares will focus on providing short-term whole loans backed by core commercial real estate assets.
CalSTRS told IPE Real Assets: “We like this strategy with respect to where we are at this point in the market cycle. It’s generally characterised by limited liquidity, peak valuations and flat appreciation growth
“We will be able to invest at a higher position in the capital stack and generate stable returns that should compare well versus returns generated from a subordinate equity position and dependent on appreciation.”
The other $200m will be placed into GTISCal Investments, an opportunistic US homebuilding joint venture it established with GTIS in the latter part of 2017.
CalSTRS said the venture will primarily focus on single-family housing projects in the East Coast, Southeast and Sunbelt regions.
“Builders have seen an increased demand for housing suburbs, generally as a result of COVID-19,” the pension fund said.
CalSTRS has also committed $200m each to CBRE US Value 9 and Secured Capital Real Estate Partners VII funds and $150m into Trigate Property Partners IV Parallel fund.
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