NORTH AMERICA – The Kansas Public Employees Retirement System has approved $165m (€125m) of new real estate investments in a combination of core and value-added investment strategies.
The pension fund earmarked as much as $125m for the JP Morgan Strategic Property fund.
Total assets in the fund stand at $18.3bn, as at the end of the first quarter of this year.
According to the Townsend Group, the Strategic Property Fund currently has an entry queue of $2.1bn, which means any new capital will take 3-4 quarters to invest.
The commingled fund has produced a 12% one-year net IRR and an 8.9% net IRR since it was launched in 1970.
Kansas PERS has five other existing core fund managers: Heitman America Realty Trust, Jamestown Premiere Property Fund, LaSalle Property Fund, Prime Property Fund and UBS Trumbull Property Fund.
Kansas PERS also set aside up to $40m for the Savanna Real Estate Fund III.
The targeted unleveraged IRRs for the commingled fund are 11.4%.
The strategy is to invest in value-add office buildings in the US Northeast, particularly New York City.
The maximum leverage is 65%.
Kansas PERS previously made a $30m investment into the Savanna Real Estate Fund II in 2011.
In other news, Harrison Street Real Estate Capital had a final capital raise of $750m for Harrison Street Real Estate Partners IV, exceeding the original target by more than $150m.
Christopher Merrill, co-founder of Harrison Street, said: "Many investors have been aware of our track record and that the property types we invest in have fractured ownership and make it difficult for many institutional investors to invest in them on their own."
The fund is to target "need-based" real estate assets, including student and senior housing, medical office buildings, self-storage properties and healthcare-related properties.
Harrison Street will invest all of its capital in the US.
Investors in the fund include a mixture of public and corporate pension funds, endowments, foundations, insurance companies and family offices.
The commitments included $50m each from San Francisco City and County Employees' Retirement System and New Mexico State Investment Council, and $40m from Kansas PERS.
Harrison Street put at least $17m of its own capital into the fund.
Investments in Partners IV are projected to achieve 16-17% net IRRs.