NORTH AMERICA – The Ohio Police & Fire Pension Fund is now conducting due diligence on a potential $40m (€30.9m) commitment into TriGate Property Partners II.
The pension fund is expected to make a final decision at its November board meeting.
The potential investment represents something of a change from how the pension fund has operated in the past.
David Graham, communications manager, said: "This new arrangement allows the pension fund staff to look at the potential commitment and then come back to the board meeting with some additional questions that it might have."
Previously, Ohio Police & Fire would tended to make final decisions on a commitment at a single board meeting.
Property Partners II will invest in non-gateway markets, which many institutional investors are now targeting.
The fund will also buy debt on an existing property and convert the position to an equity ownership of the property in the future.
The commingled fund will have a total equity raise of $300m.
Investors in the fund are projected to achieve a 15% net IRR.
Ohio Police & Fire has $30m of capital left to invest in a tactical core strategy for 2012. This likely will be in one commingled fund, and there is a possibility that the commitment may not be approved until January of 2013.
The pension fund is not quite at its 12% targeted allocation for real estate. Its existing real estate portfolio is valued at $1.2bn, nearly 10% of its total portfolio.
In other news, the San Diego City Employees' Retirement System is looking to allocate $40m into new real estate investments for its 2013 investment plan.
The pension fund expects to focus all of the capital on a non-core commingled fund strategy.
In a board meeting document, San Diego City's investment consultant Hewitt EnnisKnupp wrote that the pension fund would be "in line" in the core sector once all of its current commitments were fully drawn.
Another factor is the consultant's belief that a significant number of distressed opportunities remain in the market.
San Diego City has a real estate portfolio valued at $536m, as at the end of June. The portfolio totals 10.4% of its $5.1bn of total plan assets.
The targeted allocation for real estate is 11%.