Orange County Employees Retirement System (OCERS) has made $225m (€207.2m) worth of real estate commitments to funds managed by Carlyle, Principal Real Estate Investors and Morgan Stanley in the last few months.
The pension fund disclosed in a meeting document that it placed $100m into the open-ended Carlyle Property Investors core-plus fund, committed $75m to Principal Data Center Growth & Income Fund and placed $50m into the core open-ended Morgan Stanley Prime Property Fund.
The Carlyle fund, which has a current net asset value of $7.2bn, targets a 9-11% annual net internal rate of return with 55% leverage. Given the fund’s two-quarter entry queue, Orange County expects a 50% initial drawdown of its commitment by June and full deployment within the following two to three quarters.
According to OCERS, Principal Real Estate aims to raise $3bn for its data centre fund, with a $3.8bn hard cap.
Principal Real Estate has raised its return targets for the data centre fund. Following a third-quarter 2024 review, the net internal rate of return target has been increased from 14-16% to 17%, and the net multiple target from 1.7-1.8x to 2x. This adjustment was made to reflect the strong data centre demand, rent growth and core market performance.
OCERS said it added the $50m to its investment in the Morgan Stanley fund by acquiring shares on the secondary market, which allowed them to receive a 5% discount on the price.
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