GLOBAL - The $72.5bn (€52bn) New York State Teachers' Retirement System (NYSTRS) has approved a $50m commitment to the Cornerstone Patriot fund, a commingled fund managed by Cornerstone Real Estate Advisers.
NYSTRS said the move fit its criteria of investing in commingled funds with solid management and a proven track record providing risk-adjusted returns.
The Patriot fund is a core, open-ended commingled fund that invests in the US only, with total assets around $1.1bn from 20 investors.
One current benefit, according to NYSTRS, is that at least half of any commitment immediately goes into the commingled fund.
This amount takes out a portion of the $400m investment made into the commingled fund by Cornerstone's parent company, Mass Mutual Life Insurance Company.
The remaining half of each commitment is paid into the fund as Cornerstone makes investments.
So far this year, the manager has yet to close any deals.
This scenario differs from other core, open-ended commingled funds, such as JP Morgan's Strategic Property fund or the UBS Trumbull Property fund.
Both have entry queues before capital flows into the funds and, in some cases, new commitments by investors will not be drawn down into the commingled funds until 2011.
Pension fund officials said these investments would lead to further diversification within the real estate portfolio.
NYSTRS recently made two other real estate-related commitments - $75m commitments each to Lone Star Real Estate Fund II and Lone Star Fund VII.
The investor has placed capital with Lone Star in the past, with commitments totaling $585m in Lone Star Funds II, III, IV, V and VI.
The scheme has also invested in three of Cornerstone's commingled funds, with a total of $114m in Cornerstone Apartment Fund I and Cornerstone Apartment Venture I, while a furtrher $50m has been invested into Cornerstone Apartment Venture III.
