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New York Common eyes UK distress

The $110bn pension fund has committed $30m to the Mountgrange Real Estate Opportunity Fund I through its funds of funds investment with Franklin Templeton’s Lake Montauk vehicle. The Mountgrange fund closed in May on £300m and will target under-performing assets as well as land deals.

New York State Common Retirement Fund committed $30 million to Mountgrange Investment Management’s debut private equity real estate fund as it targets distressed assets in the UK.

The $109.9 billion pension fund – which recently banned the use of placement agents for investments in private equity and real estate vehicles – said today it made a $30 million commitment to Mountgrange Real Estate Opportunity Fund I through its existing investment in a Franklin Templeton fund of funds.

In March, New York CRF, the third-largest pension fund in the US, invested $300 million in Lake Montauk Real Estate Fund, a captive fund of funds managed by Franklin Templeton Real Estate Advisors.

Today, the pension said the commitment to Mountgrange closed on 30 April, with Credit Suisse acting as placement agent. CRF said the allocation was initiated “prior to the implementation” of the New York state comptroller Thomas DiNapoli’s ban on the use of placement agents.

Mountgrange Real Estate Opportunity Fund I, which closed on £300 million (€342 million; $475 million) in May, attracted more than 30 investors. The fund will target UK distressed opportunities, including under-performing assets or portfolios and acquisitions, strategic land opportunities and the creation of new platform businesses.