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Illinois Municipal commits $375m to RE

The pension plan made fund commitments to an Ares European strategy, Artemis Real Estate and Blackstone’s latest real estate debt fund at its Friday meeting.

The Illinois Municipal Retirement Fund (IMRF) made commitments to three real estate fund managers at its Friday meeting. IMRF committed up to €100 million to Los Angeles-based investment manager Ares Management’s European value-add fund – Ares European Property Enhancement Partners II.

Ares has a $600 million target for the fund and held a first close in the third quarter. Other investors in the vehicle include the New York State Common Retirement Fund, which allocated $350 million to the vehicle with an additional $100 million discretionary commitment. The fund has a hard cap of $900 million.

IMRF previously committed €50 million to another of the Ares European funds, Ares European Real Estate Fund IV, an opportunistic fund back in 2013. In an April investor presentation, Ares said its European value-add and opportunistic funds have returned 16 percent.

The pension system also made a new commitment to Chevy Chase, Maryland-based real estate investment manager Artemis Real Estate Partners. IMRF has committed up to $75 million to the firm, founded by Deborah Harmon and Penny Pritzker, for a minority, female or person with a disability-owned business manager-of-managers account. In July, IMRF announced it was requesting proposals from investors who fit that description.

In addition, IMRF wrote a check to The Blackstone Group for up to $100 million for Blackstone Real Estate Debt Strategies III, a $4 billion fund that started raising capital in September. Other investors in the fund include the Dallas/Fort Worth Airport, which allocated $20 million to the vehicle.

IMRF previously committed $100 million to Blackstone Real Estate Debt Strategies II, according to PERE Research & Analytics. Through this vehicle, the world’s largest asset manager invests in high-yielding secured loans in the US and Europe, targeting 12 to 13 percent returns through making mezzanine loans, whole loans and selling down the senior and financing transitional assets.

IMRF has a total portfolio worth of $34.8 billion as of October 31, with an 8 percent target allocation to real estate.