Indiana Public Retirement System has added $215m (€155m) to its real estate portfolio through three new commitments.
Two of the commitments were with the same manager, Stockbridge Capital Group. The pension fund approved two $75m allocations to the fund manager’s Value II and Stockbridge Smart Markets Fund as well as a $65m allocation to the Exeter Industrial Value Fund III.
Value II, a closed-end fund investing in the US, is looking to raise up to $500m, with a final close in December. Stockbridge is co-investing $5m in the fund.
Targeted returns for the fund are between 12% and 15% gross IRR and 10.4% to 13% net. Yields will be supported equally by income and appreciation.
Stockbridge will buy assets on the East Coast and in the San Francisco Bay and Sunbelt areas, looking for value through aggressive management, new leasing strategies, renovation or repositioning.
Indiana said the core Smart Markets Fund was a good fit within the plan’s overall asset allocation and investment objectives. The open-ended fund will buy properties in the US near major universities and educated workforces, with links to the technology, biotechnology, healthcare and energy sectors. Targeted returns are 9% gross IRR and 8.4% net.
The $65m allocation to the Exeter Industrial Value Fund III is Indiana’s first to an industrial-only fund. Total capital raise for Fund III is projected to be around $675m, existing properties and new industrial developments in the US the focus.