REAL ESTATE- The Oregon Public Employees Retirement Fund has approved new commingled fund investments totaling $450m (€357m).
The pension fund took these actions at its board meeting on September 27. It’s made commitments to five different commingled funds. They were $100m to Rockwood Capital Fund VII, $100m to Rockpoint Finance Fund I, $50m to Windsor Fund VII, $100m to Lion Mexico and $75m to Buchanan Fund V.
Real Estate Investment Officer for Oregon Brad Child said, "We think that these commingled funds will give us a good level of diversification. This would include from a deal size perspective. For instance, the Buchanan Fund looks at deals that are less than $25m, while the Rockwood Fund is at $25m and larger."
Rockwood Capital is the fund manager for Rockwood Capital Fund VII. The company is looking to raise $1bn of equity for the fund. The is a value-added fund that mainly looks to invest in the four main property types of office, industrial, retail and apartments. The fund might acquire some hotels in portfolio deals with an asset or two being located in the Caribbean. Oregon PERF is figuring on getting a 15% leveraged IRR for this fund. The commingled fund has a seven-year life.
Rockpoint Group LLC is the fund sponsor of Rockpoint Finance Fund I. The investment strategy here is to invest in land targeted for residential development. Many of the major homebuilders around the country are going through a slow period as home sales are way down.
These companies will need to buy land once the market picks back up. The commingled fund will buy the land and hold on to it until the single family housing market improves. The commingled fund should deliver mid teens leveraged IRRs to investors. This return assumes a six-year holding period. Total raise for the fund is around $750m .
Windsor Fund VII is a commingled fund managed by General Investment & Development. It has a strategy of buying and developing flex industrial properties around the country. Oregon PERF expects to achieve a mid teens leveraged IRR. The pension considers this to be a mixture of a core and value-added strategy.
Lion Mexico is a fund created by Clarion Partners. It will be looking to find value-added investment opportunities in Mexico. The property types being considered are retail, industrial and land for residential projects.
Buchanan Street Partners is managing an investment fund called Buchanan Fund V. It invests in all of the main property types. This commingled fund looks for value-added transactions. Most of the deals are under $25m.