NORTH AMERICA – The New Mexico State Investment Council has approved a $50m (€38.3m) commitment into the Berkshire Multifamily Value Plus Fund III commingled fund.
Vince Smith, deputy state investment officer, said: "This will be out first investment in an apartment-only commingled fund. The current market fundamentals are strong for apartments, and Berkshire has a strong track record investing in the property type."
Berkshire is also making a "sizeable" co-investment to its commingled fund.
"This amounts to $10m and puts it in line with industry standards for the level of a co-investment into a commingled fund," Smith said.
"We require that all of our commingled fund managers have some sort of a co-investment."
New Mexico State expects to achieve a 12-13% net IRR and a 16.5-17.5% gross IRR.
The total equity raise for Fund III is $400m of equity with a $450m hard cap. Berkshire has received a $50m firm commitment from a sovereign wealth fund.
The fund manager is hoping for a final close sometime in 2013.
Berkshire will be looking at a variety of investment strategies, including buying existing debt, direct purchases of existing properties, asset recapitalisations and risk-mitigated developments in some markets throughout the US.
The leverage component on the fund should be less than 50%.
In other investment news, New Mexico Education Retirement Board voted to make a $50m commitment into the Lone Star Fund VIII.
This commingled fund is being marketed as an opportunity fund, making distressed investments in the major markets of Europe, the US and Japan.
It has a three-year investment period and a total life of eight years from the final closing.
The investment strategy will include buying into non-performing and sub-performing single-family residential real estate secured debt, control investments in financially oriented and real-estate rich operating companies and residential mortgage-backed securities.
New Mexico Educational has a 5% targeted allocation for real estate.
The real estate programme is at approximately 38% of its target for the asset class.
