Teachers’ Retirement System of Louisiana (TRSL), which is seeking to invest more in value-add real estate strategies, is committing up to $50m (€40.1m) to a Sares-Regis multifamily fund.
In August last year, IPE Real Assets reported that the pension fund planned to favour value-add strategies and debt investments over the subsequent 12 months.
In its latest board meeting report, TRSL said it will invest in the Sares-Regis Multifamily Value-Add Fund III.
As reported earlier, Sares-Regis is looking to raise $400m for Value-Add Fund III, which would make it its largest fund ever. It raised $304m for Fund II.
According to the board meeting report, the pension fund’s investment consultant Hamilton Lane said the fund could raise as much as $500m.
The fund will invest in value-add apartment complexes in Western US markets and is targeting a gross return of 14-16%.
Hamilton Lane said the markets being targeted by the fund had strong growth prospects, with supply constraints and significant employment growth and rental growth.
As of September 2017, 33% of TRSL’s real estate portfolio was invested in residential assets – a higher exposure than its benchmark, the NCREIF Property Index, which has a 24% weighting.
As of February this year, the $20.1bn pension fund had 8% of its assets in real estate, below its target allocation of 10%.