​Illinois Teachers gives Starwood $300m follow-on mandate

Teachers’ Retirement System of the State of Illinois has given Starwood Capital Group a new real estate mandate, several months after investing in the company’s latest opportunity fund.

The pension fund confirmed to IPE Real Estate that it has awarded Starwood a new $300m (€288m) separate account to invest in value-add real estate in the US.

Starwood already manages a real estate $372m portfolio for Illinois Teachers, in addition to the $300m commitment it recieved from the pension fund in August for its Global Opportunity Fund XI.

Illinois Teachers said the follow-on mandate will be structured as “a new fund of one for TRS real estate investments alone”.

Starwood did not respond to requests for comment.

Illinois Teachers also approved a $100m commitment to a global real estate debt fund managed by Oaktree Capital.

Oaktree Real Estate Debt Fund II will invest in a variety of debt structures, including commercial mortgage-backed securities, first mortgages, junior recurred debt and mezzanine debt.

Oaktree is targeting net and gross returns of 10% and 12%, respectively, with a current income yield of 6% to 7%.

Illinois Teachers and Oaktree have a history of investing together. The manager oversees a $507m portfolio for the pension fund in its $5.6bn private equity portfolio.

Illinois Teachers has a real estate portfolio valued at $7bn, representing roughly 15% of its $45.7bn in total assets, according to figures for the end of September.

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