The Teachers’ Retirement System of Louisiana (TRSL) approved a $75 million commitment to Colony Distressed Credit Fund III at its meeting last week, director of private markets Maurice Coleman told sister publication Private Debt Investor. Colony is targeting $1 billion for investments in distressed real estate debt.
Colony Capital will aim to acquire US and Western European loan portfolios at 30 percent to 50 percent discount on unpaid balances, with an emphasis on portfolios currently held by government agencies and institutions, according to a Hamilton Lane report.
Typical portfolios will include 150 to 200 assets. Investments will have a three to five year hold period. Originations will generally come in the form of senior notes, though the fund may also invest in construction loans, renovation loans and bridge loans.
“Colony has demonstrated a consistent strategy of creating a diversified portfolio of distressed debt investments through each of its prior funds,” according to the report, which indicated that Fund I and Fund II had netted respective internal rates of return of 15.2 percent and 13.1 percent as of 31 December. Fund I, a 2008 vintage vehicle, is a top quartile fund.
Colony has invested $55 billion since its 1991 inception. The firm maintains offices in China, the UK, France, Italy, Lebanon, Luxembourg, South Korea, Spain and the US, according to its website.
In addition to its commitment to Colony, TRSL also committed $50 million to Patria’s Brazilian Private Equity Fund V, which is targeting $1.5 billion for investments in Brazilian mid-market companies.
As of 31 March, TRSL had a 4 percent allocation to private market debt, a 10 percent allocation to private equity and an 8 percent allocation to real estate, according to a monthly investment report. TRSL’s investment portfolio carried a market value of $16.4 billion as of the same date.