UNITED STATES - Pennsylvania Public School Employees Retirement System has approved commitments of up to $600m ($440.6m euros) into two commingled funds.
One of the commitments involved investing capital into the Beacon Capital Strategic Partners V commingled fund along with a co-investment for the fund.
Pennsylvania Public School agreed to invest an amount equal to 25% of the committed capital but this total is not to exceed $200m.
For this first investment, the pension fund also approved another $200m of capital for a co-investment to be used by the fund manager on some of its select opportunities by the commingled fund.
The pension fund is expecting to achieve a gross IRR in the range of 18-22%, based on a long-term holding period.
Beacon Capital is shooting for a total equity raise of $3bn and intends to invest only in acquisition, development and redevelopment of office buildings, and is looking at only a handful of cities in the United States and Europe as potential investment locations - New York, San Francisco, Washington DC, Boston, Seattle, Chicago, Denver, London and Paris.
Pennsylvania Public School has also approved a commitment into Fortress Investment Fund V, again equal to 25% of the committed capital no more than $200m.
Fortress Investment Group is a commingled fund manager the pension fund is familiar with, as it has invested capital in two previous Fortress funds.
In this Fund V capital raising, Fortress hopes to bring in $4bn to invest in control-oriented private equity investments in asset-based businesses and asset portfolios in the United States and Western Europe such as residential, commercial and senior living, as well as investing directly in public and private real estate companies.