LaSalle Gets $300M for Asia Opportunity Strategy From California Pension Fund

LaSalle Gets $300M for Asia Opportunity Strategy From California Pension Fund

CalSTRS is the latest US state pension fund to bet on Asian real estate

LaSalle Investment Management has secured a $300 million commitment from the California State Teachers’ Retirement System for the fund manager’s sixth Asian opportunistic real estate fund.

The funding for LaSalle Asia Opportunity VI, which was committed during the second half of 2021, was revealed in a semi-annual activity report issued by CalSTRS, which manages a $318.1 billion investment portfolio on behalf of public school educators in America’s biggest state.

The boost to LAO VI came at around the same time that the vehicle last November obtained a $200 million commitment from the Teachers’ Retirement System of Illinois, a substantial upsizing from the $6.9 million in TRS assets administered by Chicago-based LaSalle.

Mingtiandi reported last October that the independent affiliate of property services firm JLL had raised more than $1 billion for its sixth pan-Asia vehicle in the region, en route to its goal of $1.5 billion.

Nearing the Target

In addition to US public pension funds, investors in LAO VI include Asian and Middle Eastern sovereign wealth funds, according to a report released by the Arkansas Teacher Retirement System last October.

LaSalle Asia Pacific head Keith Fujii

The opportunistic fund aims to deliver a net internal rate of return of 18 percent over an eight-year fund life, with a maximum 70 percent loan-to-value ratio, said ATRS, which approved a $50 million commitment to the vehicle at a September meeting.

Should LaSalle reach its $1.5 billion target for LAO VI, it would represent the firm’s biggest haul for the strategy since before the 2008 financial crisis. According to the ATRS report, the LAO V iteration achieved a net IRR of 17 percent through 25 investments.

The report said LAO VI was targeting a first closing in September 2021, but LaSalle to date has not publicly announced an initial fundraising milestone for the strategy.

State-Led Streams

The disclosure of LaSalle’s latest fundraising follows Blackstone’s confirmation earlier this month that the private equity giant remains on track to reach the $9 billion goal for its Blackstone Real Estate Partners Asia III after New Mexico’s State Investment Council made a $75 million commitment to the fund in February.

The group chaired by billionaire co-founder Stephen Schwarzman had secured a $200 million pledge to the fund from the Virginia Retirement System in December, part of nearly $2.4 billion in fresh funds earmarked for the vehicle during the final quarter of 2021.

In the same period, Blackstone obtained a $100 million commitment to BREP Asia III from Florida’s State Board of Administration, which manages the assets of the Florida Retirement System and other funds.

Apart from Blackstone’s latest raisings, the Employees Retirement System of Texas disclosed in January that it had made a $50 million commitment to PAG Real Estate Partners III, the Hong Kong private equity firm’s third pan-Asian core-plus/value-add real estate fund.

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