New York State Common Retirement Fund and New Jersey Division of Investment have committed to value-add and opportunistic funds.
New York made a $339.5m (E246.2m) commitment to the JP Morgan Star Lake Fund II, while New Jersey Division of Investment approved a $100m commitment to opportunistic property investment by the Och-Ziff Real Estate Fund III.
New York split its commitment into a $291m allocation to Fund II and a $48.5m commitment as a sidecar strategy for co-investment on specific transactions. Fund II has a value-add strategy.
New York is the only investor in the fund, which is seeking existing properties with room for renovation as well as development projects. JP Morgan Asset Management Properties will asset manage the portfolio. Office, industrial, retail and apartment properties in the US are being considered by the fund, with transactions placed through local operating partners.
New York considers the commitment to Fund II as a follow-on investment, having made a $285m investment in JP Morgan Star Lake Fund I in 2008.
Meanwhile, New Jersey Division of Investment has approved a $100m commitment to opportunistic property investment by Och-Ziff Real Estate Fund III.
The fund has a projected total equity raise of $1bn, with Och-Ziff making a co-investment of at least 7.5% of the total capital raise, or $75m.
New Jersey stated in a board meeting document that its commitment will provide diversification to the division’s real estate portfolio and exposure to non-traditional assets.
The fund is expected to have 50% of its portfolio made up of non-traditional real estate property types, ranging from gaming, to distressed land and residential, cell towers, parking, golf, debt and senior housing. The remainder of the portfolio will consist of office, apartments, hotel and retail.
New Jersey formed a $1.1bn partnership in 2012 with Och-Ziff to invest across various separate account mandates in public and private assets, including US and European real estate. New Jersey has a current target allocation for real estate of 4.5%. A new asset allocation will be approved prior to the start of its next fiscal year on July 1.
