Thai state pension fund Government Pension Fund (GPF) is set to deploy $150 million into global property markets via indirect strategies after awarding Cleveland-based private markets advisory and investment firm Townsend with a separate account.
The GPF is effectively repeating a commitment to an existing account. It made its first equity commitment, of $250 million, to the Townsend account in 2012. At the time the pension had a 3.5 percent commitment to real estate entirely comprised of domestic investments. No other international real estate investments had been made before this latest commitment, it is understood.
The first tranche of equity was invested 70 percent in global core funds and 30 percent in tactical investments including: a commitment to alternative assets investment firm Fortress’s Japanese opportunity fund series; a co-investment to a joint venture in China between private equity firm Carlyle and Shanghai Yupei, the logistics development business; and an investment in the World Trade Centre, a three-office tower complex in Melbourne which was sold by private equity firm KKR, Australia-listed property investment firm Abacus Property Group and privately-owned investment house Riverlee Group for $267.5 million this year.
The Melbourne deal reportedly netted a $99.5 million capital increase for the investment group following a two-year hold.
It is understood GPF’s maiden investment has yielded a positive return for the state fund, believed to be in the 10-12 percent range, and that has prompted it to commit more capital to international property markets. The second commitment is expected to be deployed with Townsend following a similar strategy.
The firm declined to comment, but a source with knowledge of the matter told PERE: “They are still only getting started. Like any investor, they need to see good results and the more that are delivered, the more they will be comfortable.”
According to its latest publicly available literature, the pension has approximately $17 billion of assets under management, more than 60 percent of which sits in fixed-income assets. About 11 percent are classified as alternative assets.