SWIB commits to Lone Star, looks to sell US core assets

State of Wisconsin Investment Board (SWIB) has committed $121m (€108m) to Lone Star’s latest global real estate opportunity fund.

It is the eighth Lone Star fund SWIB has invested in. The pension fund has provided $762m to the manager since 1997.

SWIB told IP Real Estate that it chose to continue its relationship because Lone Star has been a strong performer in the opportunistic space.

According to the pension fund, the manager is seeking to raise $5bn for Lone Star Real Estate Fund IV, which will invest in Americas, Western Europe and Japan.

The fund will invest in both debt and equity and could buy single assets or entire portfolios. Buying distressed debt secured by real estate is part of the strategy.

Lone Star will also be looking to make entity level investments in real estate operating companies. The fund recently offered to buy listed UK property developer Quintain.

A number of US pension funds have committed to the vehicle, including South Dakota Investment Council.

SWIB also said it was selling some of its core domestic property assets to take profits.

The pension fund sold 1000 Main Street, an office building in Houston, for $435m earlier this year.

German fund manager Union Investment bought the building, which SWIB originally acquired for $335m in 2012 through Invesco Real Estate.