Texas Teachers creates co-investment vehicle for Tristan Capital fund

Teacher Retirement System of Texas has set up a €50m vehicle to co-invest alongside Tristan Capital Partners’ latest European opportunity fund.

The pension told IPE Real Estate that the ‘sidecar’ will enable it to make select investments alongside European Property Investors Special Opportunities (EPISO) 4.  

Texas Teachers is already an investor in EPISO 4, having committed €150m in 2015, representing 10% of the total €1.5bn in capital raised.

Tristan Capital is seeking to invest the fund in a mixture of western and central European markets, across the office, logistics, retail, residential and mixed-use sectors. It is targeting an internal rate of return of 15%.

The co-investment entity will be 100% owned by Texas Teachers and placed in its value-added real estate portfolio.

It will form part of the pension fund’s ‘principal investments’ programme, which can include co-investments, direct transactions and the creation of single-investor limited partnership funds.

Last month, IPE Real Estate reported on a similar move by Texas Teachers where it provided an extra $100m of co-investment capital for a senior housing fund managed by AEW Capital Management.

In 2015, it set up an office in London in part to help increase its co-investment activities.

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