GLOBAL - Oregon state pension scheme (OPERF) has agreed a $500m (€350m) five-year deal with ProLogis that will make it a cornerstone investor and "strategic partner" across the logistics firm's global funds.
At a meeting of the investment committee last week, the $59bn pension scheme agreed to channel capital via a separate-account feeder vehicle that will give it a single access point for investment in funds, joint ventures and equity.
The first investment will be a $75m capital injection in ProLogis's European Logistics Fund.
The joint venture, with an explicit focus on value-added, will target a 10-15% return.
OPERF said the venture reflected its intention to source partnerships that can provide "scalable investment strategies with global diversification".
The bulk of the capital will likely be invested within three years. A portfolio of potential future investments presented last week included $50m-100m commitments to funds covering Brazil, Japan, Canada, China and Mexico, as well as the US.
It also included a commitment to the PEPR European logistics fund recently targeted for potential takeover by a group of pension schemes led by APG after the fund listed and the pension schemes objected to what they saw as poor governance that had compromised the fund's performance. The dispute ended with APG selling its shares.
According to ProLogis's presentation last week, it will offer OPERF first refusal on potential investments and charge fees "correlated to the actual cost of providing services", including economies of scale.
Yet in a presentation that focused as much on risk-control and reporting as on returns, ProLogis confirmed that the pension scheme would retain control over which vehicles it invests in, and the amount of capital it commits to each vehicle. OPERF will not account for more than 20% of any fund, nor commit more than $100m to a single fund.
ProLogis will provide quarterly entity and fund-level reports. An annual global forecasting session will give the pension scheme the opportunity to reallocate capital across ProLogis vehicles.
In a separate development, OPERF also approved a $100m commitment to NGP Natural Resources, which is 40% owned by Barclays, for its alternatives portfolio.
In a written pitch to the board, OPERF investment managers pointed out that the US-focused energy and renewables fund manager had "never lost money for its investors" and delivered a net IRR across its funds of more than 20% over a 22-year period.
They also focused on what they described as NRP's "skin in the game" - a 2.8% commitment that is double the average rate.
