The New York State Teachers Retirement System (NYSTRS) has hired Brookfield Asset Management and Cornerstone Real Estate Advisers for real estate debt strategies.
The US pension fund allocated $350m (€317.4m) to Brookfield and $300m to Cornerstone.
NYSTRS said both Brookfield and Cornerstone’s investment strategies would target financing challenges in commercial real estate markets, with upcoming loan maturities in the coming years.
The pension fund declined to provide targeted returns for the strategies, but it said investments would be structured primarily as floating-rate loans priced over LIBOR to take advantage of any increases in market interest rates.
All of the capital will be invested in the US, with a loan-to-value ratio at a maximum of 75%.
NYSTRS said in a board meeting document that Brookfield’s investment strategy would be to provide first mortgage loans and subordinated debt.
Cornerstone, meanwhile, will focus on first mortgage bridge loans and/or B-Notes.
Preferred property types for Brookfield are multi-family, office, retail and industrial, while Cornerstone prefers a mixture of the four main property types, as well as hotels and student housing.
NYSTRS has invested with both managers in the past – more than $725m with Brookfield and approximately $340m with Cornerstone.
The pension fund has also renewed three separate account contracts with Prima Capital Advisors, LaSalle Investment Management and RREEF America.
Prima manages an account that invests in CMBS, mezzanine and B-Notes valued at $360.5m, while LaSalle runs a $131.3m real estate securities portfolio with an international ex US investment strategy.
RREEF America, meanwhile, oversees a $286.2m portfolio for REITs with an ex US strategy.