UNITED STATES - Washington State Investment Board has approved a $250m (€168m) commitment into the Morgan Stanley Real Estate Special Situations III commingled fund, to gain global exposure to real estate companies.
The pension fund decided at its board meeting on February 21, with the assistance of real estate consultant, Courtland Partners, to extend its relationship with Morgan Stanley as It has produced some solid returns and allowed the pension fund to invest in some non-traditional real estate investment opportunities.
It is anticipated its latest commitment will be invested into the commingled fund over the next 18 months as the fund is re-opened, but the pension fund has now made three separate commitments to Special Situations III.
It invested $150m into the fund in April 2006 and $200m in March 2007, and at least $100m of this capital has been invested by Morgan Stanley in Gramercy Capital, a US-based commercial real estate specialty finance company.
Morgan Stanley's fund - which is structured as an open-ended fund - currently has total assets in excess of $5bn, and has seen past interest from other pension funds, including a $200m investment by the California State Teachers Retirement System (CalSTRS).
Morgan Stanley Real Estate co-invests 25% of the total capital raised and its overall investment strategy is to make non-controlling investments in securities of real estate companies around the world, in both developed countries and emerging markets.
Developed locations could be the US, Japan, United Kingdom and western Europe, as well as Hong Kong and Korea, while deals might include financial restructurings with either public or private companies.
In the emerging markets arena, meanwhile, the commingled fund is looking to invest in companies based in China, India, Russia and eastern Europe, where the firm is seeking growth capital.