New Jersey Division of Investment is planning to make a $100m (€81m) commitment to TPG Real Estate’s latest opportunity fund.
The pension fund believes that the investment strategy of TPG Real Estate Partners III sets it apart from other opportunity funds in the market, according to a board meeting report.
TPG Real Estate did not respond to phone calls for comment. It was reported in October last year that the company is targeting a $3bn capital raise for the fund.
According to New Jersey Division of Investment, the fund will acquire or build real estate-related operating companies or entities that manage underlying real estate assets, differentiating it from the traditional practice of direct acquisitions of individual properties.
Partners III will primarily target investments in the range of $100m to $300m, but will also make smaller equity investments to purchase platforms with a view to funding future growth.
The pension fund also highlighted TPG’s research-driven approach which should enable the fund to target out-of-favour sectors, less efficient markets and identify off-market transactions.
The board meeting report shows that TPG Real Estate has, across $4.7bn of equity invested to date, returned 111% of capital, generating gross returns of 26.3%, net returns of 19.9% and a 2.1x multiple.
New Jersey Division of Investment also revealed it had hired Hamilton Lane as its new real estate investment consultant, having issued a resquest for proposals last year.