NORTH AMERICA – The Illinois Municipal Retirement Fund has approved new real estate commitments totalling $200m (€152m).
The Blackstone Group manages both of the commingled funds into which the scheme has invested.
Illinois made two $100m commitments to the Blackstone Real Estate Partners Asia and Blackstone Real Estate Debt Strategies II.
Blackstone is seeking a total capital raise of $3.5bn for the Asia fund.
The real estate manager will be a co-investor in the fund for $50m and an additional 10% in each investment made by the commingled fund.
The Asia Fund is being marketed as an opportunity fund.
Blackstone is looking to achieve a 20% gross IRR and a 2x gross multiple for its limited partners.
The fund aims to take advantage of dislocation and distress in Asian real estate markets, including Japan, Australia, China and India.
Debt Strategies II is projected to be a $3bn commingled fund employing a value-added investment strategy.
Investors in the fund are aiming to achieve a 13% net IRR.
Nearly half of the return will be supplied by current income.
Blackstone for the most part will look to purchase and originate performing loans supported by institutional-quality properties.
Structures will vary from B-notes, mezzanine debt, whole loans, participations, CMBS and preferred equity.
Illinois's targeted allocation for real estate is 6%.
As of 30 April, the pension fund was 2.8% invested in the asset class.
In other news, the Maine Public Employees Retirement System has approved a $100m commitment into the Brookfield Infrastructure Fund II.
This is a $5bn open-ended commingled fund managed by Brookfield Asset Management.
The expectation is that half of the fund will be funded by limited partners and the balance by the manager.
Investors in the fund are projected to achieve net IRRs in the range of 12% to 15%.
The leverage component on single assets will vary from 50% to 70%.
Deals for the fund will focus on a mixture of assets like renewable power, transportation, utilities and energy.
Brookfield will focus on completing large and complex transactions for the fund, investing in North America, Europe, South America and Australia/New Zealand.
The deal size is $200m-500m of equity contributed per deal.
Maine PERS has a targeted 10% allocation for infrastructure.
Its current investments for this asset class make up 2.4% of the pension fund's $11.6bn of total plan assets.
