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NJDOI allocates $100m to senior healthcare fund

The $70.9 billion pension invested in Focus Healthcare Partners’ maiden commingled senior healthcare fund.

The New Jersey Division of Investment (NJDOI) is betting on healthcare real estate in its latest round of commitments.

NJDOI wrote a $100 million check to a new real estate manager, Focus Healthcare Partners, a Chicago-based firm that has $360 million in assets under management, according to meeting materials. The firm, which declined to comment, is seeking to raise up to $250 million for Focus Healthcare Partners Fund I, its debut commingled fund. Focus plans to pursue stabilized and value-add senior living properties in primary and secondary markets that allow residents to “age in place” through different stages of need, from independent living to memory care. The properties will be primarily for private pay residents, rather than for seniors who receive reimbursement from the government, according to NJDOI.

The management fee during the investment period will be 75 basis points on committed capital and 150 basis points on invested capital. After the investment period, the management fee will be 100 basis points on invested capital and drop down to 75 basis points after three years, according to meeting materials.

Focus, which did not use a placement agent, plans to commit 1 percent to the vehicle with a $2 million cap, according to NJDOI. Law firm DLA Piper is Focus’ legal counsel.

In March, NJDOI split $200 million between two existing real estate managers, committing to Wheelock Street Capital’s new US opportunistic fund, Wheelock Street Real Estate Fund V, and Exeter Property Group’s latest commingled industrial real estate fund, Exeter Core Industrial Club Fund II.

NJDOI had invested $3.7 billion in equity-related real estate, or 5.2 percent of its overall $70.9 billion portfolio, as of April 30. It is planning to slightly increase its real estate allocation from 5.25 percent currently to 6 percent for 2017.