Texas Municipal Retirement System (TMRS) has said it is planning to invest in real estate through separate accounts and co-investments for the first time.
The $28.4bn (€24.9bn) pension fund is entering into a “strategic relationship” with Transwestern Investment Group (TIG), which will enable it to take its “first steps into separate account investing and co-investing within the real estate portfolio”, according to a board meeting report.
TMRS is allocating up to $250m to the relationship and has recommended increasing the maximum amount of capital it intends to deploy in real estate this year from $400m to $500m.
Transwestern will be able to invest across the risk spectrum, supplementing the pension funds’ existing core, value-add and opportunistic real estate investments.
The wider Transwestern group encompasses investment management, property services and development, and the TMRS report cited its “platform depth” and “operating capabilities”.
Charles Hazen, president of Transwestern, said: “TMRS had a clear vision for the strategy, and we worked together to tailor a programme with enhanced visibility, control and cost efficiency to invest across multiple real estate investment risk-return profiles through TIG’s national operator platform.”
TMRS is also planning to commit capital to two infrastructure funds managed by Global Infrastructure Partners (GIP) and InstarAGF Asset Management, respectively.
The pension fund is investing up to $200m with GIP’s infrastructure debt arm, GIP Credit, split into three commitments.
It will commit up to $75m to GIP Spectrum Fund, which provides senior debt for acquisitions or refinancings, and up to $75m to GIP Capital Solutions, which targets higher-return structured credit to fund growth and greenfield developments. The remaining $50m will be allocated for a co-investment vehicle to invest alongside GIP Capital Solutions.
TMRS also plans to commit up to $100m to InstarAGF Essential Infrastructure II, plus up to $50m in co-investment capital.
The fund focuses on middle-market infrastructure assets – with an enterprise value of between $100m and $1bn – in North America.
- American Investors
- Global Infrastructure Partners
- Investment Strategies
- Investment Vehicles
- Pension Funds
- Real Estate
- Separate accounts
- Texas Municipal Retirement System
- Transwestern Investment Group
- US Investors