Minnesota State Board of Investment (SBI) is considering a $150m (€138.9m) commitment to Torchlight Debt Opportunity Fund VIII, according to the pension fund’s board meeting document.
The proposed investment, which would be made via the pension fund’s private credit portfolio, would not exceed 20% of Fund VIII’s total capital raise, which is set at $2bn.
If approved, the commitment would mark Minnesota SBI’s first-ever investment in a fund managed by Torchlight Investors.
Fund VIII is expected to target properties in the US by allocating around 60% of its capital to private market debt investments and 40% to the public market debt sector.
The private debt investment includes senior mortgages, mezzanine loans, preferred equity, and equity interests. The public debt could be commercial mortgage-backed securitisation (CMBS), single-asset single-borrower CMBS and Freddie Max K-Series CMBS.
Once fully invested, Fund VIII, is expected to target a 7% annual distribution rate to investors in the long term.
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