NORTH AMERICA – The Texas Municipal Retirement System has approved new real estate commitments totalling $250m (€184m).
The only new manager the pension fund hired was Greenfield Partners.
The commitment was for $75m into the Greenfield Acquisition Partners VII.
The other three hires were follow-on commitments with existing managers: $75m to Stockbridge Value Fund II and $50m each to Stockbridge Smart Markets Fund and Harrison Street Securities.
The pension fund made all of these commitments based on the recommendation of its real estate consultant, ORG Portfolio Management.
Acquisition Partners VII is considered to be a value-add/opportunistic commingled fund.
The total capital raise is $750m, while the targeted leverage component is 50-60% on a loan-to-cost basis.
The vast majority of the deals will be located in the US.
With board approval, there will be select opportunities considered in Europe and Central and South America.
The targeted returns for the fund are a 15% gross and 13% net IRR.
The property types will include mostly office and industrial and a limited amount of public university student housing development.
Stockbridge is looking to raise $400m-500m for its Value Fund II.
The targeted returns are a 12-15% gross IRR and a 10.4-13% net IRR.
The fund manager will be making a $5m co-investment.
The investment focus is to buy assets that are undervalued, underutilised or otherwise not operating to their full potential.
The targeted property types are office, industrial, retail and apartments in the US on the West and East Coasts and in the Sunbelt.
The commitment into the Smart Markets Fund represents the third allocation made to the fund.
The first $100m was placed in September 2011 and a second $50m allocation was made in December 2012.
The fund invests in core properties in the US that are considered to be small or medium sized.
The two biggest areas of concentration for the fund are in the Pacific and Southeast regions.
