The Pennsylvania State Employees' Retirement System (PA SERS) has agreed to commit up to $25 million to LEM Mezzanine's third high-yield real estate debt fund. An announcement from the $26 billion public pension plan revealed that its board approved the commitment to LEM Real Estate High Yield Debt Fund III during its meeting this week.
According to the Philadelphia-based private equity and mezzanine debt investor's website, the firm is an independent sister company to Lubert-Adler Real Estate and runs a series of private equity funds with more than $450 million of equity. It focuses on proving debt financing to multifamily, office, retail and industrial properties in the US, generally valued between $10 million and $60 million, and seeks to invest roughly $100 million per year. Both the Harrisburg, Pennsylvania-based pension fund and LEM declined to comment further on details of Fund III.
A spokesperson for PA SERS confirmed that this is its first commitment to LEM. She also noted that the pension fund is in the early stages of considering a commitment to The Blackstone Group, stating that during the review meeting, the PA SERS staff “notified the board that they would like to bring Blackstone before them for a future interview.” Latest reports reveal that New York-based Blackstone already has raised $3 billion of its $10 billion target for its seventh global opportunistic real estate fund.
As reported in March, PA SERS previously resolved to commit $15 million to BPG Properties' ninth real estate fund. BPG Investment Partnership IX is a value-added vehicle targeting $250 million. The commitment to BPG IX was one of three that the fnud previously made to private equity and real estate funds.