NYSTRS awards Grosvenor $100m separate account debt mandate

The New York State Teachers Retirement System (NYSTRS) has formed a $100m (€91.8m) debt separate account with Grosvenor Capital Management.

The pension fund is looking to increase its exposure to real estate debt to diversify its real estate portfolio and access returns above those from fixed income.

The CFIG Real Estate Debt Investment strategy will place capital with emerging real estate debt managers.

Capital will be invested in the US, with a targeted 9-10% net IRR.

The separate account is part of $356m of new capital approved by NYSTRS.

The pension fund approved a $91m mortgage on a 650,000 sq ft Park Avenue South office building now 99% occupied. 

The loan will be used for improvements.

The pension fund also provided a $169m first mortgage on the Eleven Times Square asset.

The 1.1m sq ft property is 85% let.

The new facility will be used to refinance existing debt on the asset.

NYSTRS has extended the contract of one of its REIT separate account managers, Cohen & Steers Capital Management.

It can invest in preferred securities of REITs or real estate operating companies.

The new one-year contract starts in September.

The relationship was formed in 2007 with a $100m allocation.

The portfolio, managed by Cohen & Steers, had a value of $165.6m, as of June.