Return to search

IMRF earmarks $115m to three RE firms

The $34.7 billion pension system wrote checks to two established managers and one emerging manager.

The Illinois Municipal Retirement Fund (IMRF) doled out $115 million to three managers at its meeting Friday.

The pension system, which oversaw $34.7 billion as of June 30, has 5.4 percent of its assets allocated to real estate, with a target of 8 percent to the asset class.

In its latest round of commitments, the fund returned to invest with AEW Global, writing a $50 million check to AEW Partners VIII. The Boston-based private equity real estate firm launched the opportunistic fund in April with a $650 million target, according to PERE research. IMRF has a total of $245 million invested with AEW’s funds, including $25 million to AEW Partners VII, according to the pension system.

IMRF also went back to Los Angeles-based CBRE Global Investors (GI), allocating $35 million to CBRE Strategic Partners US Value VIII. The pension fund has $217 million invested with CBRE. The firm’s value-added fund series invests between $20 million and $250 million per transaction across property types in major and secondary US markets, according to CBRE GI’s website. The firm launched CBRE Strategic Partners US Value VII in April 2014 and closed in June 2015 on $1.3 billion. A spokeswoman for CBRE GI declined to comment on the current fundraise. IMRF’s previous commitments to CBRE GI include $125 million to CBRE US Core Partners; $30 million to CBRE Strategic Partners US Value VI; and $35 million to CBRE Strategic Partners US VII, according to PERE research.

Additionally, IMRF made a follow-on investment to an emerging manager for its third July real estate commitment, investing $30 million with Long Wharf Real Estate Partners V. Boston-based Long Wharf, which spun out from Fidelity Investments in 2011, launched its fifth US-focused value-added fund in the first quarter of 2015 and held a first close in June 2015. The firm plans to hold a final close for the fund later this year, PERE previously reported. IMRF committed $13.7 million to the firm’s fourth fund, which closed in September 2013 on $253 million. IMRF allocates to emerging managers through Franklin Templeton’s emerging manager of managers program.

Long Wharf is targeting $350 million for the latest fund, with a net internal rate of return of between 12 and 15 percent, PERE previously reported. The vehicle will have a similar strategy to that of the firm’s earlier funds, with investments diversified across property sectors and geographies in the US. Investors in Long Wharf Real Estate Partners V include the Municipal Fire and Police Retirement System of Iowa, which committed $25 million; the San Diego City Employees’ Retirement System, which allocated $20 million; and the Houston Municipal Employees’ Pension System and the Houston Police Officers’ Pension System, which each earmarked $15 million, according to PERE research.

IMRF’s $1.9 billion in real estate investments have recently outperformed the pension fund’s overall portfolio. In the year ending March 31, real estate had an 11 percent return, compared with a negative 2 percent return for the entire portfolio, according to its most recent performance report.