New Jersey Division of Investment is considering making a $400m (€353.2m) commitment to a real estate separate account relationship with The Townsend Group, according to the pension fund’s board meeting document.
Once approved, the pension fund would hold a 99% interest in the separate account, with Townsend committing $4m for a 1% stake in the separate account.
New Jersey will retain control over the separate account’s portfolio construction through its right to approve all prospective investments.
One part of the separate account’s strategy involves allocating 40% to 50% of the portfolio in primary funds including funds with capital raises ranging from $500m to $2bn. This would involve issuing new commitments, secondaries and co-investments across risk-return profiles focused on non-core private real estate.
The remaining 50% to 60% of the strategy’s allocation would be placed in tactical investments, encompassing property types outside of non-core. The strategy is expected to consider investment structures such as joint ventures, entity-level investments, placing capital into real estate operating companies, co-investments, platforms, secondaries and seed investments.
The separate account targets a net return of 13%.
Townsend did not respond to a request for comment.
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