UNITED STATES - Three pension funds in the United States have decided to keep their original commitments in the Westbrook Real Estate Fund VIII, despite being given the option to reduce their holdings.
Westbrook Partners initiated a process earlier this year advising investors in Fund VIII they could reduce their original commitments by 10% if they wished to do so.
The Teachers Retirement System of Texas has commitments worth $250m (€197.7m) but deided to stay with the real estate managers, alongside Pennsylvania State Employees Retirement System and Ohio Police and Fire Pension Fund which have commitments of $50m and $25m respectively.
Pension fund officials at Ohio Police and Fire said the real estate manager made this offer in an effort to assuage potential investors' liquidity issues.
But the pension fund's executives still believe in the investment strategy for the commingled fund as they believe Fund VIII has been compelling in the past and is more so today because of the state of real estate pricing in some of its targeted markets, such as London and Tokyo.
Ohio Police and Fire will achieve one of its investment goals through this commingled as Fund VIII gives it more international diversification and increases the international component of its real estate portfolio to 4%.
The pension fund would like to increase this over the next few years as its long-term target allocation is 25% with a 35% cap on international investing.
Texas Teachers commitment to Fund VIII was split in two different allocations: a $150m commitment that went directly into the commingled fund, and an additional $100m allocation in a sidecar investment to Fund VIII which would be used for co-investments.
Westbrook Partners raised $2.5bn for Fund VIII but at this time the real estate manager has not invested any of this capital.