Insights

KAP’s insights on private equity investor relations and fundraising

 

Welcome to the Re-KAP! Each week, we’ll round up news and happenings from the real estate private equity marketplace and share them with you here.

 

LIMITED PARTNER NEWS

With fall board meetings underway, public pension plans are carefully examining their asset allocations. The following decisions represent a net positive for real estate private equity.

San Antonio Fire & Police Pension Fund (SAFP) recommended $45M in aggregate commitments:

  •  $15 million to Covenant Apartment Fund IX
  • $10 million to Invesco (IVZ) U.S. Value-Add Fund V
  • $10 million to Townsend Real Estate Alpha Fund III
  • $10 million to Rockpoint Real Estate Fund VI

SAFP is considering re-upping with at least five current managers over the next 15 months. Notably, a re-up with JP Morgan Asset Management was not recommended.

Arkansas Teacher’s Retirement System authorized up to $30 million for LA-based Calmwater Asset Management’s U.S. Real Estate Credit Fund III. The fund, with a target size of $750 million, will focus on making senior secured loans on transitional commercial real estate properties in primary and secondary U.S. markets.

The Public School Employees’ Retirement System (PSERS) approved a 1% reduction from each of its private equity and real estate allocations, to support a 2% increase in their allocation to credit-related investments, citing the relative attractiveness of private debt investment opportunities. According to PSERS’ documents, as of March 31, 2017 the pension fund had existing relationships with 28 real estate managers, and their $5.9 billion real estate portfolio constituted 11.5% of their overall portfolio. The most recently available performance of their real estate portfolio can be seen here.

PEOPLE MOVES

New York-based Meadow Partners created a new role for Alison Garcia, who will lead business development and investor relations. She joins the firm after six years as the Director of Real Estate for the North Carolina Retirement System, where she was involved in real estate commitments exceeding $6 billion, including commitments to Meadow Partners. Ms. Garcia notes that her primary objective will be to expand and diversify Meadow’s existing investor base, which currently consists primarily of foundations and endowments. According to Preqin, Meadow Partners has raised four funds since its founding in 2009, totaling nearly $1.2 billion in capital commitments.

 NOTABLE TRANSACTIONS

Morgan Stanley acquired Mesa West Capital, the L.A.-based commercial real estate debt fund manager with $5 billion AUM. Mesa West will remain in L.A. and keep its name, while operating as a separate business within Morgan Stanley’s real assets group, allowing MS to augment its equity offerings with real estate credit.

Boston-based asset manager Columbia Threadneedle Investments is adding a U.S. real estate arm with the purchase of Houston-based Lionstone Partners. Acquisition rationale includes the belief that U.S. real estate is attracting significant global capital flows, especially into core.

After 11 years of ownership, BNY Mellon sold CenterSquare Investment Management to CenterSquare’s management team and PE firm Lovell Minnick Partners, in a transaction that is expected to close by the end of the year.