REAL ESTATE - The Ohio Police & Fire Pension Fund has made a $25m (€19.6m) commitment to the Westbrook Real Estate Fund VII.
This was an investment that was approved by the pension fund’s staff and real estate consultant Townsend Group, at its board meeting at the end of August.
The fund felt very comfortable with the job that Westbrook Partners had done in its previous investment funds.
Ohio Police & Fire put $10m in Westbrook Real Estate Fund I in 1995 and $20m in Westbrook Real Estate Fund VI in May this year.
Most of the capital from these investments has been taken down. There is now $781,000 left in Fund I and $698,000 left in Fund VI.
Ohio Police & Fire is anticipating achieving a gross IRR of 20% and a net IRR of 16% for Westbrook Real Estate Fund VII. These yields are factoring in a three- to seven-year holding period.
Westbrook Real Estate Fund VII is being marketed as a real estate opportunity fund. Some of the deals that it will look at include re-capitalization of existing real estate companies and investing in companies with dysfunctional ownership.
It will look at a variety of property types. These could be the four main property types of office, industrial, retail and apartments. It will also look to invest in some specialized property types as well.
Both individual deals and portfolio transactions will be considered. Westbrook Partners plans to invest in assets in three parts of the world. These would be real estate in the United States, Europe and Japan.
As of the middle of August, Ohio Police & Fire has a real estate portfolio valued at $524m. This figure does not include many of the commingled fund investments that the pension fund has made the past few months. The only once included in this amount is a $50 million commitment made to RREEF American REIT II. The pension fund approved this investment in late June.
Ohio Police & Fire now has invested 4.8% of its total assets in real estate. The pension fund still has a long way to go before it reaches its targeted allocation for real estate of 8%. The investment strategy for now is to continue to grow the portfolio through making new commingled fund commitments.