The Florida State Board of Administration (SBA) has returned to two of its existing general partners in its latest round of real estate commitments, the pension fund said Monday.
In the first quarter of 2016, SBA earmarked $100 million to Blackstone Real Estate Partners (BREP) Europe V, The Blackstone Group’s latest opportunistic European real estate vehicle. The pension fund has committed to at least six of Blackstone’s real estate funds, according to PERE Research & Analytics.
Blackstone has garnered $5.2 billion in commitments for BREP Europe V, according to the firm’s first-quarter earnings statement last month. The firm officially launched the vehicle with a €6.7 billion ($7.7 billion) target at the start of 2016, but had been doing early marketing to existing limited partners since at least the fourth quarter of last year, according to documents from San Francisco Employees’ Retirement System (SFERS), which allocated $100 million to the vehicle. Tony James, Blackstone’s president, said on a media call last month that the BREP Europe V will likely be larger than its predecessor, which raised about $8.8 billion in two tranches and closed in March 2014 after just six months in market. BREP Europe IV was generating a 16 percent net internal rate of return (IRR) as of March 31, according to the first-quarter earnings report.
Blackstone plans to deploy at least 60 percent of the latest fund’s capital in the UK, Germany and France, countries that the firm identifies as having the best transparency and liquidity, according to SFERS. Blackstone plans to assemble sector-specific portfolios and operating platforms, and targets a 15 percent net IRR with a 1.7x net multiple, for BREP Europe V, according to SFERS. Other major US pension funds that invested in BREP Europe V include the Teacher Retirement System of Texas and the South Dakota Investment Council, which both allocated $300 million, according to PERE Research & Analytics.
SBA also wrote a $75 million check to Trigate Capital’s Trigate Property Partners III. The pension system allocated $50 million to the Dallas-based firm’s predecessor vehicle.
For its latest fund, TriGate held a first close in December with capital exclusively from returning institutional investors, sources told PERE in February. The firm has a $350 million target for the third vehicle, with a hard cap of $400 million. The firm closed TriGate Property Partners II on $324 million in June 2013 and finished deploying capital from the vehicle in December, PERE reported earlier this year.
TriGate has a plan for capital deployment similar to the earlier funds in the series, seeking distressed debt and equity of existing properties with the goal of value creation through the recapitalization and repositioning of Class A and B real estate assets. The firm focuses its activities in Sunbelt markets including Florida, Georgia, Texas, Arizona, Colorado and California and has made multiple investments in suburban Boston and Chicago, according to its website.
The California State Teachers’ Retirement Association and SFERS also allocated $75 million each to Trigate Property Partners III, according to PERE Research & Analytics.
In the fourth quarter of 2015, SBA earmarked $350 million to real estate. Florida Retirement System, on behalf of which SBA manages investments, had $142.4 billion in assets as of April 29 and has allocated 6 percent of its portfolio to real estate, according to PERE Research & Analytics. Florida SBA had $179 billion in assets under management as of April 29.