New York State Common invests $200m in European debt fund

New York State Common Retirement Fund is committing $200m (€188m) to PGIM Real Estate’s latest European real estate debt fund.

It is the first time that the $179bn pension fund has invested with PGIM Real Estate, which is owned by Prudential Financial insurance company in Chicago.

NYS Common Retirement Fund said PGIM, which created a European debt investment platform in 2009, had “a strong track record and history in this space”.

PGIM has executed 45 debt investments in Europe, deploying $2.6bn in junior debt, preferred equity and structured loans.

The pension fund said “a large percentage of the total return is expected in the form of current income and the investment provides downside protection”.

According to the pension fund, PGIM is aiming to raise £1bn (€1.17bn) for its latest fund and will target net returns of 12%, with 6% coming from income.

Earlier this year, IPE Real Estate reported that PGIM was close to raising £500m for the fund. 

PGIM did not comment.

Around 70% of the fund be invested in the UK and Germany. The rest of the portfolio will be within other western European countries.

NYS Common Retirement Fund is not shying away from investing in the UK or Europe due to uncertainty surrounding Brexit.

“We still believe that investment opportunities exist in the region that meet the fund’s standards for risk and return,” the pension fund said.

PGIM is targeting the office, retail, industrial and residential sectors for the fund.

The total number of transactions in the fund will be in the range of 25 to 30, with most deals in the £25m to £30m range.

 

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