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Kentucky commits to Lubert-Adler, Greenfield

The $15.5 billion retirement system has committed a total of $80 million to the latest fund offerings by Greenfield Partners and Lubert-Adler Partners.

The Kentucky Retirement Systems (KRS) has approved two commitments of $40 million each to Greenfield Partners’ Greenfield Acquisition Partners (GAP) VII and Lubert-Adler Partners’ Lubert-Adler Real Estate Fund VII.
South Norwalk, Connecticut-based investment manager Greenfield Partners has a $750 million target for GAP VII, its seventh opportunity fund and tenth real estate fund overall.  The firm collected nearly $120 million in the initial close of the fund in January, according to a filing with the US Securities and Exchange Commission. Other investors in the fund include the Texas Municipal Retirement System (TMRS), which committed $75 million to the vehicle in September.
GAP VII will pursue value-added real estate opportunities in suburban office, industrial properties and public university student housing developments, as well as targeting properties in markets with strong or improving supply and demand fundamentals but weak capital interest. GAP VII primarily will invest in the US, as well as in select opportunities in Europe and Central and South America. The firm is seeking a gross return of 15 percent and a 2x gross equity multiple, and a net return of 13 percent and 1.8x net multiple for GAP VII.
For Lubert-Adler Fund VII, the Philadelphia-based real estate firm is targeting $500 million in equity commitments. Fund VII held an interim close last month on $212.5 million, according to an SEC filing. Additional investors in the fund include the Santa Barbara County Employees’ Retirement System and the Pennsylvania State Employees’ Retirement System, as well as TMRS. 
Fund VII will focus on investing in middle-market retail, multifamily, hotel and industrial assets exclusively in the US through joint ventures with operating partners. Through the vehicle, Lubert-Adler plans to acquire assets at significant discounts via note purchases from lenders and servicers, real estate owned situations, borrower recapitalizations and bankruptcy proceedings. Fund VII is seeking a gross return of 20 percent and a net return of 18 percent. 
KRS, which is comprised of the state pension and insurance funds, has a current allocation to real estate of 3.5 percent and a 5 percent target allocation for the asset class. At the $15.5 billion retirement system’s May meeting, investment staff and consultant ORG Portfolio Management chose to defer the recommendation of a third undisclosed real estate commitment to a later meeting.