GLOBAL - The Ohio Public Employees Retirement System is conducting due diligence on investments into two new commingled funds totalling $400m (€287.4m).

One of these is a $200m commitment to the Lubert-Adler Fund VI-B.

Fund VI-B is a co-investment fund for the existing Lubert-Adler Real Estate Fund VI, an opportunity fund set up in 2008 and for which Lubert-Adler raised $2.5bn of equity.

Pension fund officials said Lubert-Adler had distinguished itself using an opportunistic acquisition philosophy, coupled with a "value-enhancement asset management programme", creating high-quality assets at a cost well below competitors.

Fund VI-B will access opportunistic real estate using a debt structure in a loan-to-own strategy, investing primarily in assets in North America. 

Ohio's other $200m investment is with Landmark Real Estate Partners VI, whose investment strategy is to buy secondary interests in closed-end commingled funds.

Pension fund officials cited the limited competition involved with the strategy and the fact many investors were now looking to exit investments that have been made in closed-end funds over the last five years.

The total amount of capital raised for the fund is projected to be in the region of $400m.

Investors in the commingled fund - which has a 10-year life span and a four-year investment period - are projected to achieve a leveraged internal rate of return in the mid to high teens.

Real Estate Partners VI will be buying interests in commingled funds that employ value-added, core and opportunistic strategies.

Topics