NORTH AMERICA - State of Wisconsin Investment Board (SWIB) has approved $225m (€176.6m) worth of new commitments to core real estate on the equity and debt side of the real estate spectrum.
The pension fund moved ahead with a $125m commitment to the UBS Trumbull Property Fund, its second commitment to the vehicle to date. Earlier this year the board had made a $20m commitment to Trumbull.
Vicki Hearing, public information officer for the pension fund, told IP Real Estate SWIB did consider the universe of core open-ended funds before making a final decision. The Trumbull fund was selected based on a number of criteria including asset quality, manager track record, leverage, valuation and fees.
There is likely that SWIB's commitment to Trumbull will not be called from the manager for some time. According to information from the Orange County Employees Retirement System, there was a $2.7bn entry queue at the end of September, amounting to an 18 month to 2 year period.
Orange County currently has Trumbull amoung its finalists for a mandate, with a decision due on 28 November. The other finalists are ASB Allegiance Fund, JP Morgan Strategic Property Fund and the TIAA-CREF Core Property Fund.
According to Orange County data, total plan assets in the Trumbull Fund currently stand at $13.4bn, stemming from 170 investments over 343 investors. The fund currently allows 15% of assets to be invested in new developments and has an occupancy rate above 92%.
Additionally, SWIB has approved a $100m allocation to the Heitman Debt Separate Account Tranche 2, deemed a follow-on investment. The pension fund had previously allocated $120m of capital to the Heitman Debt Separate Account Tranche 1 between November 2010 and October 2011. All of the capital for the initial allocation has been invested.
Hearing said that the overall investment strategy for the account with Heitman was to provide new debt for properties. The transactions would be in major institutional markets within the United States and all commercial property types are to be considered.
The $88bn pension fund has a sizable equity real estate portfolio valued at $4.7bn as of the end of September.