Starwood opportunity fund attracts South Dakota capital

The South Dakota Investment Council has approved a total new investment of $150m (€139.3m) in Starwood’s Global Opportunity Fund XI, according to the pension fund’s website.

The US pension fund is backing the manager’s value-add/opportunistic XI Global fund, for which Starwood is looking at a $6bn equity raise.

The largest portion of the commitment comes from the South Dakota Retirement System, with the pension fund making a total investment of $134.7m.

A further $15.3m of commitments comes from the Education Enhancement Trust ($6.5m) and the Dakota Cement Trust ($3.7m), while $3.5m comes from the School and Public Lands and $1.6m from the Health Care Trust.

South Dakota previously backed the manager’s ninth and tenth funds with $144m.

Deals for Starwood’s latest fund will include existing properties, new developments and debt secured by properties.

Targeted property types include hotels, industrial, office, retail and residential.

Starwood will find deals either directly or in partnerships and joint ventures.

The fund will give South Dakota international real estate exposure, with around half of the fund to be invested in Europe.

Limited partners are projected to achieve net IRRs of 14-16%.

The Teacher Retirement System of Texas recently approved a $200m commitment to XI Global fund, while the fund has also been backed by Teachers’ Retirement System of the State of Illinois.

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