Texas Teachers creates $400m co-investment vehicle with Blackstone

Teacher Retirement System of Texas has set up a $400m (€339m) co-investment vehicle with Blackstone Real Estate Partners targeting opportunistic US property deals.

The new limited partnership is called BREP Texas Trinity Fund, and all of the capital for the joint investment vehicle is being provided by Texas Teachers, the pension fund said.  

Blackstone declined to comment.

Texas Teachers said the co-investment vehicle would only invest in the US, targeting a variety of property types and making opportunistic deals.

The only commingled fund in the US that Blackstone is now investing for is Blackstone Real Estate Partners Fund VIII.

Texas Teachers and Blackstone have a long history of investing together through commingled funds as well as co-investment partnerships.  

These cooperations have included global commingled funds, and some deals with a specific emphasis on Europe.

Separately, Texas Teachers has also expanded its relationship with AEW Capital Management through a new $150m commitment.

This capital will be split, with $100m being placed into the AEW Value Investors Asia III commingled fund and $50m as a co-investment alongside it.

The commitment from Texas Teachers forms part of a $750m capital raise AEW is planning for the fund, according to sources tracking capital raised by major property managers.

Texas Teachers said the AEW fund would invest in developed markets in Asia, targeting regions such as Hong Kong, Singapore, Seoul, Shanghai and Taipei and investing in a mix of office and retail properties.

The fund is targeting returns of 13-15% in net IRR terms.

Texas Teachers invested in AEW’s Asia II fund last year, putting $100m directly into the fund with another $50m of co-investment capital.

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