The New York State Common Retirement Fund has agreed to put $200 million in equity in AREA Property Partners’ AREA European Property Enhancement Program, a commingled fund of one where the pension plan will be the sole limited partner. On behalf of the fund, the New York-based private equity real estate firm will pursue real estate equity investments in Western Europe that are “suitable for a value-added strategy,” a spokesman said in an email. Like most commingled vehicles, NY Common does not have discretion over investments made on behalf of the fund.
The commitment represents the pension plan’s largest investment in AREA to date. NY Common previously committed a total of $225 million to the firm’s previous European funds, including $75 million to Apollo European Real Estate Fund II in 2004 and $150 million to Apollo European Real Estate Fund III in December 2007. Formed in 1993, AREA was known as Apollo Real Estate Advisors until it was renamed in 2009.
AREA European Property Enhancement Program is separate from AREA European Real Estate Fund IV, which the firm launched early last year and will focus primarily on investments in the UK, Germany, France and select markets in Central and Eastern Europe. The firm is targeting €750 million in commitments for the latter fund.
NY Common also has invested in other Europe-focused real estate funds, such as The Carlyle Group’s Carlyle Europe Real Estate Partners II and III and CBRE Global Investors’ Richard Ellis. In March 2008, it committed $606 million to invest in self-storage properties in Europe through a joint venture with Public Storage.
NY Common’s real-estate-related investments include directly owned real estate, joint ventures, commingled funds, co-investment funds, fund of funds, captive funds and mortgage loans, according to its website. The pension plan held approximately $9.4 billion, or 6.1 percent of its total portfolio, in equity real estate at the end of its last fiscal year on March 31.