UNITED STATES - The Texas Permanent School Fund has increased its real estate allocation from 6% to 8%, paving the way for $200m (€162m) in new investments.
The institutional investor has not confirmed what real estate strategies it will target over the long term, but it has approved two $75m commitments to a property debt fund managed by Mesa West Capital and opportunistic manager Oaktree, respectively.
Mesa West Real Estate Income Fund III is a closed-ended commingled vehicle that will provide financing for value-added real estate investments across the US, targeting the office, industrial, retail, apartment and hotel sectors.
The Texas Permanent School Fund confirmed that the 8% allocation target enabled the new commitment to Oaktree to be increased by $25m from an original $50m.
Last November, the institution approved a commitment of up to $50m to the Oaktree Real Estate Opportunities Fund V, a commingled vehicle targeting distressed real estate both in the equity and debt segments of the capital stack.
Pat Hardy, chair at the Permanent School Fund, said: "There are going to be some attractive real estate opportunities for us to take advantage of in the marketplace."
The decision to raise the real estate quota was based on recommendations from investment consultant NEPC. The investor will work with its real estate consultant Courtland Partners on a longer-term strategy.
