NORTH AMERICA – The Teacher Retirement System of Texas has approved more than $430m (€330m) in new real estate investments, including a €100m allocation to Tristan EPISO 3, a value-add fund managed by Tristan Capital Partners. 

The fund will invest in existing assets only, including office buildings, logistics, shopping centres, high street retail and apartments. 

The fund manager will seek deals primarily in Germany and Poland, although it will consider some assets in the UK on a selective basis. 

Most properties will have a holding period of 3-5 years.

The real estate manager anticipates a final close on the fund in June or July, with a total capital raise of around €750m.

The fund will have a 60% leverage cap and a three-year investment period, with a possible one-year extension.

Tristan has estimated a 15% net IRR and an 18% gross IRR for limited partners.

Texas Teachers also approved a $300m investment into the KKR Real Estate Partners Americas fund, managed by Kohlberg Kravis Roberts.

The opportunistic fund will aim to buy properties in Europe and the US, including retail assets in the UK.

Many of the deals for the fund, which will have a leverage range of 55-65%, will include the recapitalisation and repositioning of existing assets.

As of the end of 2012, Texas Teachers had $14.3bn in its real assets portfolio, in which it places its real estate investments.

The pension fund has a 15% targeted allocation for the asset class.

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