The Arkansas Teacher Retirement System (ATRS) has agreed to invest in Rockwood Capital's latest real estate fund. The $11.6 billion state pension plan's board has approved a commitment of up to $30 million to Rockwood Capital Real Estate Partners Fund IX, according to various media reports. The contribution was part of $135 million commitment to four different funds, the bulk of which were focused on private equity.
George Hopkins, director of ATRS, told PERE that this commitment will mark the pension plan's first contribution to a fund managed by Rockwood. The pension's consultant, Hewitt EnnisKnupp, advised ATRS on the decision to commit.
“Based on [Rockwood's] history, its access to deal flow, the quality of its team and the strength of the environment for its specialised area of focus, we decided to give them a shot,” added Hopkins.
New York-based Rockwood Capital's ninth US real estate fund, the launch of which was reported in February, is a value-added vehicle targeting $750 million in equity commitments, with a hard cap of $1 billion. The fund primarily will target hotels, offices, residential and retail properties with steady income streams that have the potential for redevelopment. Rockwood plans to focus on California and the Boston-to-Washington corridor, but it also may make some purchases in Arizona and Florida on behalf of the fund.
Hopkins noted that ATRS prefers to commit to “two or three” opportunistic or value-added real estate fund managers per year. “Thirty million dollars is not a whole lot, but we try to make smaller commitments to a larger number of managers,” he said. “We like to diversify our investments.”
In addition to Rockwood's commingled vehicle, ATRS contributed to three private equity funds: Riverside Fund V, Court Square Capital Partners Fund III and TPG Credit Strategies Fund II.
Rockwood's first eight funds have raised nearly $5 billion in commitments. Its last vehicle, Fund VIII, closed on $964 million of equity in 2009 and is almost fully invested. Rockwood Capital declined to comment.