TPG Real Estate plans $3bn capital raise for Fund III
US private equity firm TPG Real Estate is planning to raise $3bn (€2.6bn) for its third real estate fund, according to one of its investors.
Following approval by its board, Texas Municipal Retirement System said in its meeting document that it will commit $100m to TPG Real Estate Fund III.
TPG Real Estate did not comment.
Fund III has an opportunistic strategy and Texas Municipal said the fund will target at least a 15% net internal rate of return with a 1.7% equity multiple.
The pension fund said Fund III will give it global exposure and will invest in assets that have value-add and operational-turnaround opportunities.
Texas Municipal’s commitment follows the success of TPG’s previous funds. In its meeting document, the pension fund said TPG’s Real Estate Fund II to date has been a top-quartile performer among its peers and so far has returned a substantial portion of its capital to its limited partners. A $100m commitment was made into TPG’s Fund II.
Texas Municipal has also approved a $100m commitment to Madison Realty Capital Debt Fund IV, a $1bn fund managed by Madison Realty Capital.
The fund has a regional investment strategy focused on assets in the tri-state region of New York City.