SWIB buys 8 RE stakes in secondaries deal – Exclusive

The Wisconsin system also invested $200m in a pair of funds and $177m in two joint ventures.

The State of Wisconsin Investment Board is expanding its interests in existing commingled funds through the purchase of stakes in eight vehicles for $231 million, PERE has learned.

Madison, Wisconsin-based SWIB invested a total of $608 million in real estate from June 8 through September 1. Of that capital, $231 million went to purchasing additional stakes in eight real estate funds.

SWIB invested the most capital with Blackstone, buying into three of the firm’s real estate vehicles for a total of $69.3 million, a spokeswoman told PERE. The pension system purchased stakes in two of its most recent global opportunistic funds, Blackstone Real Estate Partners VIII and VII, and one US opportunistic separate account. SWIB had previously invested a total of $500 million in the two funds and another US opportunistic separate account, according to PERE data.

SWIB also invested $61.5 million with Westbrook Partners across the firm’s three most recent global vehicles, Westbrook Real Estate Funds VIII, IX and X. The pension system has invested an undisclosed amount in the value-added funds.

Finally, SWIB bought stakes in two of Beacon Capital Partners’ latest North America-focused value-added vehicles, Beacon Capital Strategic Partners VI and VII. The system had originally committed a total of $225 million to the vehicles.

A spokeswoman for SWIB declined further comment.

In its other recent real estate commitments, the pension system invested nearly $377 million in US-focused joint ventures and funds.

SWIB returned to two previous partners for its recent joint ventures. The pension system inked its fifth JV with Palo Alto, California-based Essex Property Trust, investing $150 million in a core multifamily partnership. SWIB also allocated $27 million to an opportunistic industrial real estate joint venture with Hartford, Connecticut-based Penwood Real Estate Investment Management. In 2015, SWIB invested $75 million with Penwood’s fourth value-added, industrial-focused commingled fund, according to PERE data.

On the funds side, SWIB agreed to invest $100 million in the San Francisco-based FPA Multifamily’s latest core-plus multifamily fund, FPA Core Plus Fund III, and also wrote a $100 million check to Realterm for the Annapolis, Maryland firm’s core industrial open-ended fund, Realterm Logistics Income Fund.

SWIB also has three unnamed investments under review, according to its most recent investment report: a core senior living separate account, to which it could commit $100 million; a value-added US industrial fund, to which it could earmark $75 million; and a US office fund co-investment, to which it could invest $20 million.

The pension system managed $6.1 billion in real estate as of July 31, with 71 percent of its portfolio in core, 15 percent in value-added and 13 percent in opportunistic holdings.

Real estate secondaries transaction volume hit $4 billion in the first half of 2017, driven by large transactions and an increase in dedicated dry powder during the first six months of the year, according to a report from Greenhill Cogent.

“The market is on track to meet or exceed the record $7.5 billion of real estate transaction volume in 2015,” Greenhill noted.

Other public pension plans in major real estate secondaries acquisitions this year include the California Public Employees’ Retirement System. In May, the pension system said it committed $75 million to consolidate its stake in CIM Urban Real Estate Fund, a vehicle to which it originally committed $125 million in December 2000, PERE previously reported.