The New York State Common Retirement Fund bet big on real estate in its latest round of commitments, allocating $550 million to two real estate funds, according to its March investment report.
The pension system, which manages the assets of the New York State and Local Employees’ Retirement System and the New York State Police and Fire Retirement System, wrote a $350 million check to Swiss bank UBS’s open-ended core fund. NYSCRF has investments with UBS in other asset classes, including $25 million invested in the company’s stock as of March 31, 2016, according to the pension system’s most recent investment report.
UBS’s core fund, UBS Trumbull Property Fund, was capitalized with $22.8 billion and had 224 investments as of June 30, according to meeting materials from another investor, Merced County Employees’ Retirement Association. With capital from the fund, the firm invests in apartments, hotels, industrial, retail and office properties across the US. The fund generated a 9.1 percent gross rate of return since its 1978 inception, and a net return of 10.7 percent for the year ended June 30.
NYSCRF also brought in a new manager in March, earmarking $200 million to a parallel fund to invest alongside GreenOak US III, the latest opportunistic vehicle from New York-based GreenOak Real Estate.
The fund, which launched in March 2016 with a $1 billion target, had corralled $800 million of capital at the end of March, according to PERE data. The Chicago Teachers’ Pension Fund was another investor, committing $25 million. GreenOak closed its second fund in the series in September 2014 on $756 million.
Neither UBS nor GreenOak used a placement agent with NYSCRF, according to the pension system.
NYSCRF had $5.4 billion invested in private equity real estate funds and $12.6 billion in real estate overall as of March 31, 2016, according to its annual investment report. The asset class returned 13.1 percent in the year ending March 31, 2016, while NYSCRF’s overall $178.6 billion portfolio returned .19 percent.