Illinois Teachers commits to Oaktree

The $38.1 billion pension system has approved a commitment of $75 million to Oaktree Real Estate Opportunities Fund VI.

The Teachers’ Retirement System of the State of Illinois has contributed to Oaktree Capital Management’s latest real estate opportunity fund. A spokesman for the $38.1 billion pension system confirmed that the pension system approved a commitment of $75 million to Oaktree Real Estate Opportunities Fund (ROF) VI at its May board of trustees meeting.

Oaktree is looking to raise $1.5 billion for ROF VI. It previously was reported that the Los Angeles-based private equity firm had raised $750 million earlier this month, following a third closing in March. Oaktree anticipates a final close for the fund by year’s end. 

ROF VI will adopt a similar investment strategy to its predecessor—opportunistic real estate investments in North America and Western Europe—with the possible difference that the firm will be less active in the residential real estate market. While Oaktree expects to be less focused on the residential, the fund is anticipated to invest heavily in commercial real estate, particularly rescue financing.

Oaktree launched ROF VI during the second quarter of 2012, shortly after the final close of ROF V in early 2012. ROF V raised a total of $1.3 billion and now is fully invested.

Illinois Teachers, which began investing in real estate in 1983, currently has invested or committed nearly $5.9 billion to the asset class, according to its website. Its real estate portfolio includes direct and commingled fund investments in the office, retail, industrial, apartment and hotel sectors throughout the US and abroad. The pension system, whose real estate holdings currently account for about 12 percent of its total assets, has a long-term real estate allocation target of 14 percent.