TH Real Estate to launch US debt fund – Exclusive

The company is investing $250m of TIAA’s capital alongside a pending commitment from a public pension fund.

On the heels of several US real estate debt-focused joint ventures, TH Real Estate is launching its first US commingled fund for the strategy, PERE has learned.

The London-based investment manager owned by TIAA is planning to invest $250 million on behalf of the TIAA General Account alongside its first investor, a state pension plan that is still in due diligence for a $250 million commitment, sources familiar with the fundraising process said.

A spokeswoman declined to comment.

PERE understands the open-ended fund, which is still unnamed, is set to launch in the third quarter. TH Real Estate will initially focus on investing the fund’s capital in the US but could potentially expand the vehicle’s geographic mandate.

TH Real Estate is understood to be seeking Korean institutional capital, among other sources, for the commingled debt vehicle, with no commitments as of press time. The firm already has a track record of investing in US real estate debt with Korean partners: in January, it inked a $1 billion joint venture with The Korean Teachers’ Credit Union to invest in commercial real estate loans in the US, PERE previously reported. TH Real Estate owns a 51 percent stake in the JV, with its share of capital being invested on behalf of the TIAA General Account. KTCU owns the remaining share.

The joint venture was the third partnership between the two firms for US debt investments. In 2014, KTCU led a club of Korean investors to co-invest along with TH Real Estate a total of $455 million in commercial mortgages backed by three office buildings. Later that same year, KTCU and TH Real Estate established a second joint venture to seek up to $1 billion in additional investments, including mezzanine loans backed by two Class A office properties.

TH Real Estate closed 62 commercial loan deals in the US and UK last year, with an aggregate value of more than $4.4 billion, according to a company statement. Overall, the firm has $99.1 billion in assets under management globally via a combination of debt and equity funds and mandates.