Return to search

Texas Permanent commits to Metropolitan SMA

The pension has committed $100m to a vehicle that will invest alongside the Carlyle unit’s latest real estate-focused secondaries fund.

Texas State Board of Education has committed $100 million to a secondaries-focused separate account managed by Metropolitan Real Estate Equity Management on behalf of the Texas Permanent School Fund (PSF), according to sister publication Secondaries Investor.

The board approved the commitment at its September 15 meeting, which was re-broadcast on its website. PSF will have full discretion on investments from the 24-month vehicle, according to Thomas Hester, a senior vice-president at real estate advisor Courtland Partners, who recommended the investment at the meeting.

Metropolitan, Carlyle’s real estate focused fund of funds unit, held the final close on Metropolitan Real Estate Partners Secondaries & Co-Investments Fund last February on $550 million, above its $400 million target.

The fund’s internal rate of return was higher than 34 percent, Hester said.

“The separate account arrangements are very common among our peers to access transactions either through co-investments or in this case, more targeted towards secondaries,” John Grubenman, PSF’s director of private markets, said at the meeting. “We think it’s a very efficient way to build sourcing and to access these transactions which are very attractive on a risk-adjusted return.”

PSF had previously committed $900 million to a separately managed account run by Neuberger Berman that invests in secondaries and co-investments, according to PEI data. Last October, PSF renewed the contract for another three years.

PSF had $34.5 billion in total assets as of 31 August 2015, according to its latest annual report.