The private real estate universe is growing, and PERE’s annual list of the biggest capital providers is growing with it. Our Global Investor 50 this year added 20 extra names to reflect the significant expansion and diversification of institutional investors in the private real estate space.
The ranking tracks discretionary equity committed to real estate through commingled funds, separate accounts, joint ventures, club vehicles and direct acquisitions. A full methodology – and the entire ranking itself – can be found here.
Now, we continue our countdown with the investors from 39-30…
Ohio Public Employees Retirement System
Ohio Public Employees Retirement System is typically an investor in real estate funds, with at least 80 percent of its private real estate investments made as limited partnerships. The pension plan invests globally, including Latin America and the Middle East. OPERS has historically invested in marquee private real estate investment managers, such as Och-Ziff, LaSalle Investment Management and Colony. The pension plan currently has $8.02 billion committed to private real estate from its $90.6 billion total portfolio. This makes it slightly underweight to its long-term target of 10 percent, which should see OPERS remain an active investor in property in the coming years.
Oregon State Treasury
Oregon Public Employees’ Retirement Fund continued to move its portfolio away from REITs and high-risk commingled funds in favor of core and core-plus investments. The investor earmarked $250 million to Morgan Stanley’s open-ended core fund in April and $300 million last December to JPMorgan’s vehicle with the same strategy. Oregon also inked a $250 million joint venture in March with an existing manager to invest in core apartments in coastal US markets. The system is bulking up its alternative investment teams, with plans to hire three new investment officers for its private equity, real estate and alternative investments asset classes in the next two years, it said in August.
Alberta Investment Management Corporation
Making its debut on the PERE ranking, the Alberta Investment Management Corporation has continued to focus its direct real estate investments made with joint venture partners in Canada and the UK, picking up four assets and selling three, per Real Capital Analytics.
Overall, the pension system has 85 percent of its portfolio invested in core properties and 15 percent in opportunistic and development positions. AIMCo also invests in niche property types through six externally managed Canadian opportunistic funds and three vehicles in Mexico, Europe and the US.
Last year, real estate underperformed its benchmark, returning 4.6 percent in the 12 months to December 31, compared with a 5.8 percent target.
Dutch pension fund bpfBOUW, which represents the country’s construction workers, allocates around 20 percent of its assets into real estate, handled by investment manager Bouwinvest. Led by Stephen Tross, the manager oversees five sector-specific Dutch property funds, focusing on residential, retail, office, hotel and healthcare. The first three are open to institutional investors, while the latter two are solely for construction workers. Last year, the firm committed €100 million to Hines’ pan-European core fund, GRESB’s number one-rated vehicle, extending both its reach into Europe’s retail and office markets and reinforcing its commitment to sustainable investing. Bouwinvest followed that up with a €50 million commitment to Genesta’s €600 million Nordic real estate vehicle. This year also saw Bouwinvest take its commitments to Australian student housing past €80 million.
Dai-ichi Life Insurance Company
It has been a landmark year for the Japanese insurer’s real estate program. In August, Nikkei revealed that Dai-ichi Life Insurance had relaunched its overseas real estate investment strategy after a hiatus of 26 years. The insurer is understood to be investing ¥10 billion ($90 million; €75 million) in a fund of funds. Its first target market will be Europe, where it would invest in as many as 500 office buildings across 15 countries, with the US and Australia next on its radar in 2018. In February, the insurer also made an approximately ¥6.8 billion investment in a Japanese logistics center via a real estate investment fund managed by ORIX Real Estate Investment Advisors, seen as an attempt by Dai-ichi to diversify its investment holdings.
Legal and General
One of the UK’s largest insurers, Legal & General runs its real assets investment activity from Legal & General Investment Management with $10.9 billion invested in real estate via multiple channels. It commits substantial capital to its own 11 core and core-plus property funds, as well as providing capital to three core-focused separate account mandates. However, LGIM does invest higher-up the risk spectrum too and has formed eight joint venture partnerships with value-added or opportunistic strategies.
Notable recent acquisitions for the insurer include August’s investment in the India Buildings in Liverpool, for which it secured the UK government as an anchor tenant. It used capital from its open-ended LPI Income Property Fund to make the investment. The group has also been busy developing property, and in June, together with Mitsubishi Estate London, broke ground at 245 Hammersmith Road, the pair’s 250,000 square-foot office-based scheme.
HQ: New York
The New York State Teachers’ Retirement System invests through a variety of structures, with a tilt toward opportunistic funds, which comprise $4.4 billion of its portfolio. Core accounts for $1.1 billion, with value-added vehicles at $2.4 billion. The pension’s interest in commingled funds is largely limited to US-focused vehicles.
Outside of the fund space, the pension system has $1.9 billion invested in private real estate operating companies and $2 billion in core joint ventures. In August, NYSTRS brought in CBRE Global Investors as a US separate account advisor. As a direct investor, the biggest deal for NYSTRS was one of its largest dispositions to date with the March exit of 245 Park Avenue. NYSTRS bought a 49 percent stake in the 1.8 million-square-foot office in 2003 for $438 million and sold its interest, alongside majority stakeholder Brookfield Property Partners, to China’s HNA Group for $2.2 billion.
The real estate arm of Manulife Financial Corporation dropped three spots this year. Operating as John Hancock in the US, the firm made several domestic buys, including a 224-unit Boston apartment building for $149 million and a $48 million Georgia logistics center.
Internationally, Manulife’s headline deal was the February purchase of a 28-story office building in Singapore for $527 million. On the dispositions side, John Hancock sold a Chicago office building for $121 million in September and a corporate center outside of the Windy City for $74 million in March. In the funds space, Manulife primarily invests in core vehicles.
Its most recent investment was a C$42.9 million ($34.4 million; €29 million) check from its General Account to the Hancock US Real Estate Fund, an open-ended, core-plus vehicle focused on apartments, office and industrial properties in large US markets.
Pensioenfonds Zorg en Welzijn
Pensioenfonds Zorg en Welzijn, the pension plan for Dutch healthcare workers, has around 6 percent of its assets wrapped up in private real estate, overseen by pension administrator PGGM.
Aside from limited partnership commitments, the investor has also been increasing its exposure to separate account mandates and joint ventures in the asset class. In March, PGGM partnered with IDERA Capital Management, the boutique private equity real estate firm, on a €210 million Japan-focused residential joint venture.
The Dutch pension manager also teamed up with London-based private equity real estate firm Rockspring Property Investment Managers to invest in Berlin offices to take advantage of the city’s burgeoning tech scene. The pair established a €250 million joint venture that will look to acquire offices housing media, telecommunications and technology tenants against a value-added strategy in July.
New York State Common Retirement Fund
New York State Common Retirement Fund pledged $1.15 billion to real estate managers in 2017, starting the year with a $300 million follow-on commitment to its joint venture with MetLife. MetLife Core Plus Partners – where NYCRF will have discretion on all new investments – will be focused on core-plus and value-added office, multifamily, industrial, retail and mixed-use properties in select US markets.
The pension plan’s other real estate equity investments this year were to funds, including $350 million in March to UBS’s UBS Trumbull Property Fund, a core open-end real estate vehicle targeting the four main property types in the US; $200 million the same month to a parallel vehicle to GreenOak Real Estate’s third US fund, in a new relationship; and $300 million to Prologis’s open-ended US real estate fund, Prologis Targeted US Logistics Fund, in July.
For PERE Investor 50 profiles 5-1, click here
For PERE Investor 50 profiles 10-6, click here.
For PERE Investor 50 profiles 11-19, click here.
For PERE Investor 50 profiles 29-20, click here.
For PERE Investor 50 profiles 50-40, click here.