Oregon Public Employees Retirement Fund (PERF) has become an investor in the AEW Core Property Trust following the acquisition of $110m (€91.5m) worth of shares from an unnamed exiting limited partner (LP).
Anthony Breault, senior investment officer for the Oregon State Treasury, which oversees the investments for Oregon PERF, said: “We actually underwrote a potential investment in the AEW fund three years ago when we were looking to expand our core open-ended fund sector.”
This new investment came about as a result of Oregon PERF being contacted by AEW and the LP, Breault said.
The low fee was very attractive to Oregon PERF, he added.
”The previous LP was an original investor in the fund and its fee was able to be transferred to us and its 50% less than what you would typically see in an open-ended fund,” said Breault, without disclosing the name of the LP.
AEW declined to comment when contacted for this story.
The $82bn pension fund has expanded its real estate separate account relationship with Ascentris with a new $350 capital commitment, according to its meeting document. The relationship with Ascentris started in 2013.
Oregon PERF holds investment discretion on this capital and it must approve each transaction for this relationship. This capital will be invested in one or two very large and complex mixed-use developments in the US.
“We approved this capital as we don’t really have this type of real estate in our portfolio at this time. It takes a long time to create these types of properties through a total development that can take six to eight years through the development of three to four phases,” said Breault.
The targeted returns for each phase of the development will be mid to upper teen net internal rate of returns.
Ascentris did not respond to a request for comment.
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