UNITED STATES - New York State Teachers Retirement System (NYSTRS) has approved $405m (€260.4m) in new real estate commitments to non-core strategies.
The pension fund decided at its April 30 board meeting to move additional assets in this space as officials note this is where many of the largest pension funds in the United States are investing most of their capital.
Moreover, they believe this sector of the real estate market will offer the best investment opportunities for this year.
One of these commitments was a follow-on investment of up to $50m to the Cabot Industrial value fund III, having made a similarly sized commitment to Cabot Industrial Value Fund II in 2005.
Cabot Properties is trying to raise $700m for its latest commingled fund and has projected investors will achieve leveraged IRRs of 12-14%, once it improves underperforming industrial offerings or those in need of renovation.
Some assets may be used for investments in new development projects, and while this is a mostly US-focused fund, around 10% of the capital could be invested in Canadian, Mexican or European markets.
NYSTRS has also committed up to $50m to the Rockwood Capital Real Estate fund VIII - which invests in value-added transaction across all major property types - although the fund has stressed this allocation must not be more than 20% of the total capital raised.
Up to $55m is also committed to Westbrook Real Estate Fund VIII, a global opportunity fund seeking to raise $2.5bn and with projected annual IRR returns of 15% net and 20% gross.
Its general strategy is to execute smaller off-market transactions in some of the major markets around the globe, such as London, Paris, Tokyo, San Francisco, New York and Washington DC.
At the same time, NYSTRS approved capital commitments for investing in commercial mortgage backed securities (CMBS): $100m each to BlackRock Financial Management and ING Clarion Capital and a further $50m to Prima Capital Advisors.