The Texas Municipal Retirement System is backing funds managed by Blackstone and DivcoWest targeting US real estate.
The US pension fund approved commitments of $300m (€267.5m) into Blackstone Property Partners and $75m into DivcoWest Fund V, according to a board meeting document.
The allocations are part of the roughly $600m in real estate investment the pension fund has planned for 2016, with the remaining $225m to be given to three funds later this year.
Blackstone Property Partners, the manager’s first core/core-plus product, is aiming for a net 8% return, with half of the return coming from current income, according to Texas Municipal.
Total committed capital into the open-ended fund, targeting the US and Canada, was $10.3bn, at the end of 2015, according to Blackstone’s 10-K issued on 26 February.
According to Texas Municipal, all of the assets bought by the third quarter of last year had been in the US, with the largest concentration of properties, 59%, in the north-east.
The fund is so far 41% invested in retail, 37% in office and 22% in multifamily, as well as targeting industrial properties.
DivcoWest, meanwhile, is aiming to raise $1.5bn for its US-focused fund.
The value-added fund is targeting a 10-13% net IRR, with 65% leverage, giving the manager a $4.3bn total capitalisation.
Fund V, investing capital in office buildings and R&D properties, can place capital in existing assets and new developments.
DivcoWest targets properties in high-growth markets, looking at job growth and office space demand as key indicators.
