Illinois Teachers commits to LaSalle’s Asia fund

The state retirement plan has approved a commitment of $75 million to LaSalle Asia Opportunity Fund IV, which is targeting up to $700 million.

The Teachers' Retirement System of Illinois has committed $75 million to LaSalle Investment Management’s latest Asian real estate fund, which is targeting an array of property types in Asia and Australia. 

Sources familiar with the situation have told PERE that the vehicle, LaSalle Asia Opportunity Fund (LAOF) IV, is a closed-end opportunistic fund targeting between $500 million and $700 million in equity commitments. Launched in late 2011, the fund invests in office, retail, residential and commercial properties in China, Japan, Australia, Singapore, Korea and Hong Kong and is targeting a first close of $200 million. Representatives from LaSalle declined to comment. 

As PERE reported last October, LaSalle cancelled about $600 million in capital commitments to its $3 billion LAOF III in order to focus on LAOF IV. Following the expiration of the investment period of LAOF III in June 2011, at which point the Chicago-based firm had invested roughly $2.4 billion of the fund’s $3 billion of committed capital, it decided to embark on a fresh fundraising programme for a successor vehicle rather than seek an investment extension for the remaining capital.

According to an announcement from the $35 billion state retirement system, the commitment to LaSalle’s fund was approved at its regular board meeting in May. Illinois Teachers currently has $4.4 billion allotted to invest in real estate.

This contribution to LaSalle from Illinois Teachers is markedly smaller than the pension plan’s recent commitments to real estate funds. Earlier this year, Illinois Teachers approved a commitment of $150 million to Starwood Capital Group’s latest global distressed real estate fund, Starwood Distressed Opportunity Fund IX. In December 2011, it was announced that the state pension fund agreed to commit $200 million to The Blackstone Group’s $10 billion global real estate fund, Blackstone Real Estate Partners VII.