Contra Costa commits to two value-added funds

The $5.95 billion pension system has contributed a total of $60 million to closed-ended vehicles managed by Invesco and Long Wharf.

The Contra Costa County Employees Retirement Association (CCCERA) has committed a total of $60 million to two North America-focused value-added real estate funds. 

Documents from the $5.95 billion pension system reveal that the board approved a contribution of $35 million to Invesco Real Estate Fund (IREF) III and a contribution of $25 million to Long Wharf Real Estate Partners (LWREP) IV. These contributions are consistent with CCCERA’s $240 million real estate deployment plan, which was approved at its May 1 board meeting. 

CCCERA has a long-standing relationship with Dallas-based Invesco Real Estate, having previously contributed $50 million and $85 million to IREF I and II, respectively. The pension plan also has contributed to two prior funds managed by the Long Wharf Real Estate investment team, when it operated under the name Fidelity Real Estate. 

Launched in May 2011, IREF III is seeking $400 million in equity commitments. Invesco is targeting diversified real estate investments throughout North America and already has made six acquisitions on the fund’s behalf. The firm is seeking a 12 percent net IRR, with a 10 percent annual preferred rate of return.

Prior to CCCERA’s commitment, IREF III had raised $305 million in commitments, and a final close is anticipated by June 30. Other investors in the fund include the National Pension Service of Korea, the North Dakota State Investment Board and the San Bernardino County Employees' Retirement Association, according to PERE Research & Analytics. 

LWREP IV is a value-added real estate fund targeting $250 million in equity. Launched in June 2011, the fund has raised $80 million prior to CCCERA’s commitment and has committed $54 million to four investments. The fund is targeting a 12 percent to 15 percent net IRR to investors and, like IREF III, it is targeting a 10 percent annual preferred return. 

In an interview with PERE when the firm spun out of Fidelity Investments in 2011, Long Wharf executive managing director Michael Elizondo declined to comment on any fundraising efforts. However, he said the firm would continue to be active in value-added office, multifamily, retail, hotel, industrial and student and senior housing investments in the US.