Avon Pension Fund targets US core debt market

The pension fund of UK local authority, Bath & North East Somerset Council, is taking advantage of the repriced US core real estate debt market via Partners Group.

The Avon Pension Fund administered by British local authority, Bath & North East Somerset Council, has made an allocation to the US distressed real estate market.

It has invested in the re-priced core US real estate debt market by providing refinancing debt via Swiss-based advisor and fund manager, Partners Group.  

Partners Group, which is an alternative asset manager, has been implementing a £90 million (€100 million;  $149 million) private real estate mandate for the UK pension fund.

In a statement, it said the Avon Pension Fund had recently made a direct investment in a US residential loan portfolio at 36 percent below face value, representing a discount of 40 percent to fair market value.

Avon Pension Fund is also investing in real estate secondary opportunities which will give the investor immediate exposure to the asset class, along with vintage year diversification and early distributions.

“Investments made by Partners Group in secondary assets have already distributed proceeds from two transactions only five months after the initial investment,” said the firm in a statement. “The latest successful exit of an asset in China is likely to generate more than 4x the initial investment amount for Partners Group's clients.”

The pension fund will further gain exposure to “highly attractive investment propositions” in various other markets around the globe.