NORTH AMERICA – The Ohio Bureau of Workers' Compensation is planning is planning to make $150m (€111.2m) worth of commitments to non-core real estate funds this year.
The first commitment is a $50m allocation to the KTR Industrial Fund III, a commingled fund managed by KTR Capital Partners.
The manager is targeting a $750m equity raise with a $1bn hard cap.
The leverage limitations are 65% LTV across the portfolio and 80% on a single investment.
Other investors in the fund include the Kansas Public Employees Retirement System and the Fort Worth Employees' Retirement Fund.
KTR's senior team will be making a 2% co-investment to the fund with a maximum amount of $15m.
Ohio Bureau made the commitment based on the recommendation of its real estate consultant, RV Kuhns & Associates.
The consultant said the target IRR for the fund was 13-15% net IRR, combining income of around 45% and appreciation of the balance.
Fund III will only invest in industrial properties. These can be the purchase of existing non-stabilised assets, class B properties or the purchase of distressed debt with the intent to foreclose on the property at some point in the future.
The fund will focus on four target markets – Los Angeles, New Jersey/New York, Chicago and Miami/South Florida – which together make up 75% of its investments.
Ohio Bureau Workers has earmarked $400m for value-added strategies within the next three years and is planning to make additional commitments to core in future.
The pension fund has a targeted long-term allocation for real estate of 6%.