Savanna Investment Management has written off all remaining investments held by investors in its third US real estate fund to zero, according to Kansas Public Employees Retirement System (PERS).
Kansas PERS which approved a $40m (€36.9m) commitment to the Savanna Real Estate Fund III in 2013, disclosed in a meeting document that the write-down had wiped out all remaining investments held by limited partners in the fund.
Other limited partners in the fund included the Los Angeles Fire and Police Pensions and the Teacher Retirement System of Texas which had committed $50m and $25m respectively to Fund III.
Savanna raised $443m for Fund III, a value-added office building fund that focuses on New York City. The maximum leverage component on the fund was projected to be 65% with a targetted unleveraged internal rate of returns for the fund at around 11.5%.
Over the past few years, Kansas PERS placed fund manager Savanna on probation on a number of occasions but has now removed the fund manager as there was no reported value for the pension fund’s investment in Fund III.
Updating in October last year, Kansas PERS disclosed that the fund still held seven properties. Fund III had restructured loans on three of those properties, and negotiations were underway to restructure loans on the remaining three.
Savanna did not respond to a request for comment.
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