The Florida State Board of Administration (SBA) has committed $100 million to the Rockpoint Group’s latest real estate vehicle as part of an overall goal to invest up to $6 billion into alternative assets over the next three years, including $1 billion in real estate. This commitment was part of $1 billion that the pension system committed to alternatives during the second quarter alone, with the remainder going to private equity and strategic investments.
Florida SBA’s recent real estate equity commitments include allocations of $300 million to The Blackstone Group’s Blackstone Real Estate Partners VII in January and $83 million to The Carlyle Group’s Carlyle Realty Partners VI during the fourth quarter of 2011. The $158.2 billion pension system also has invested in real estate debt through its strategic investments asset class, most recently a $75 million commitment to Colony Capital’s Colony Distressed Credit Fund II during the fourth quarter.
Rockpoint Real Estate Fund IV has a target size of $2.5 billion to $2.75 billion and will make direct investments in real estate equity, preferred equity and debt on an opportunistic basis, according to documents from New Mexico Educational Retirement Board (ERB), which agreed to invest $50 million in the fund at its November 2011 meeting. Other limited partners include the New York State Teachers' Retirement System, which agreed to allocate $55 million in November; the Employees Retirement System of Texas, which committed $110 million in April; the Oregon Investment Council and the North Carolina Retirement Systems, which each committed $100 million in February and June, respectively, and San Francisco Employees' Retirement System, which approved a $44 million commitment yesterday, according to those pension plans. Rockpoint is not using a placement agent.
With Fund IV, Rockpoint will focus 80 percent of investments on the US – particularly the markets of Washington DC, Boston and northern and southern California– and 20 percent internationally, according to the New Mexico documents. For international investments, the firm traditionally has targeted opportunities in major coastal markets in Japan and Western Europe.
Investments generally include assets that have been underutilised, have large vacancies or require capital improvements. About 40 percent to 50 percent of the firm’s investments have been in the office sector, 30 percent to 35 percent in hotels and 10 percent to 15 percent in apartments.
Rockpoint, which will co-invest $50 million in Fund IV, held a first close on $330 million in capital in November, according to a filing with the US Securities and Exchange Commission. The firm declined to comment, but PERE understands that the fund so far has raised about $1.4 billion.