The Employees Retirement System of Texas picked three managers for its latest round of real estate commitments, according to a spokeswoman.
ERS wrote a $50 million check to DRA Advisors for the firm’s latest value-added fund, DRA Growth and Income Fund IX. New York-based DRA launched the vehicle with a $1.3 billion target in April and held a close on $343 million in July, according to PERE data. ERS also committed $50 million to the firm’s predecessor vehicle, according to its website. Through the fund series, the firm invests in diversified sectors in the US, including office, retail, multifamily and industrial.
Other investors in DRA’s ninth fund include the Pennsylvania Public School Employees’ Retirement System, which allocated $100 million, and Texas Permanent School Fund, which earmarked $75 million, according to PERE data.
ERS also earmarked $40 million to Wheelock Street Capital’s most recent opportunistic fund, Wheelock Street Real Estate Fund V. ERS previously allocated $47 million to the Greenwich, Connecticut-based real estate investment firm’s second fund, according to PERE data.
The New Jersey Division of Investment was another investor in the new Wheelock vehicle, allocating $100 million at its March 2016 meeting. NJDOI documents said Wheelock launched the fund in the first quarter of 2016 with a $700 million target and a $725 million hard-cap. Wheelock is making a 2.5 percent equity commitment to Fund V and plans to deploy capital from the fund into a variety of US investments across asset classes, buying individual assets, portfolios and operating companies, according to NJDOI.
Finally, ERS allocated $25 million to Pennybacker Capital’s Pennybacker IV. The Austin-headquartered firm began fundraising for the value-added vehicle in 2016 with a $450 million target, and had raised $203 million in October, according to PERE data. In 2013, the pension fund allocated $15 million to the firm’s third fund, which attracted a total of $322 million, according to PERE data.
The pension system also selected an interim real estate consultant after the real estate team at RVK, its previous consultant, left unexpectedly to start their own firm, Alignium. ERS terminated its contract with RVK “due to diminished real estate resources” and selected Aon Hewitt, the Lincolnshire, Illinois-based consultancy, out of its three existing consultant relationships “due to their skill set coupled with our current needs and situation,” according to meeting materials.
ERS has begun the formal solicitation process for its next real estate consultant.
The pension fund managed $25.5 billion as of December, with 9 percent of its portfolio invested in real estate, according to its website.