Minnesota State Board of Investment (SBI) has proposed a $200m (€166.1m) commitment to Brookfield Asset Management’s sixth commercial real estate finance fund.
In a meeting document, the pension fund recommended the capital approval to Brookfield Real Estate Finance Fund VI, a fund seeking $3bn capital raise to target investments in the US and some European countries including the UK.
Brookfield raised $3bn for the predecessor fund in November 2017.
Fund VI targets an 8% to 10% net internal rate of return and 11% to 13% gross return. The fund will be originating whole loans, providing capital to recapitalisation transactions and purchasing debt secured by real estate.
Most of the deals for the fund will target investments generally within the 60% to 80% loan-to-value tranche of property financing.
Minnesota SBI also recommended a potential $100m investment to Lubert-Adler Recovery and Enhancement Capital Fund, an opportunistic US real estate fund with a $1bn hard cap fundraising target.
The fund will invest in rental asset transactions involving property types like multifamily, retail, hospitality and industrial.
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