UNITED STATES - The San Francisco City and County Employees' Retirement System is transferring the assets held in a separate account managed by Capmark Real Estate Equity Group following the asset manager's bankruptcy.
Trecap Partners is the beneficiary of this move, as Capmark Financial Group and some of its subsidiaries filed for Chapter 11 bankruptcy protection in October 2009.
Capmark is the parent company of Commercial Equity Investments, which in turn the parent company of Property Equity Investments - the firm with which the pension fund held the Apartment Properties Income and Growth Fund I separate account (APIGFI).
The fund had assets worth $61m (€42.7m) at the end of September 2009 while there was another $63m of capital in unfunded commitments held in the account.
APIGFI had in the main invested in 24 value-added and high return US residential but was also looking to invest in niche holdings such as student housing and condominiums.
The Capmark bankruptcy has encouraged San Francisco City and County to place several restrictions on the account, which in future means the pension fund will not be obliged to place additional capital contributions for new investments in the separate account.
This is a unique move as managers usually insist that some new capital is added to an account whenever it is taken over.
The pension fund has also added a 30-day key man termination clause to be exercised should either Robert Fabiszewski, head of real estate equity at Capmark or Wayne Harris, in portfolio management for Capmark, no longer be actively involved in the management of the separate account assets.
These two people have been involved with the portfolio for a long time. They are part of the 33-member former Capmark team. Fabiszewski was the person who originated the relationship with the manager and pension fund in 2001.
The APIGFI arrangement might not be the only former pension fund account that Trecap takes over from Capmark as the firm has offered to buy the management contracts and the general partner/managing member interests of four other existing commingled funds from Property Equity Investments.
Many of the investors in the funds are pension fund clients with - like SanFRAN CCERS - Townsend as its real estate consultant.
If all of the investors agree to the transfer, the total assets involved would be worth approximately $5bn.