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Ohio School Employees makes $30m follow-on commitment with Carlyle Group

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  • Ohio School Employees makes $30m follow-on commitment with Carlyle Group

GLOBAL - The School Employees Retirement System of Ohio has approved a $30m (€22.5m) commitment into the Carlyle Realty Partners VI commingled fund. 

This will be the fourth commingled fund the pension fund has invested in with The Carlyle Group.

The pension fund had invested $125m of equity with the manager in three of its previous commingled funds: $25m in Carlyle Realty Partners IV in 2005, $50m in Carlyle Realty Partners V in 2006 and $50m to Carlyle Asia Realty Partners II in 2008.

Pension fund officials said all of the previous funds were currently performing as expected or above expectation, given the difficult vintage years. 

At a minimum, each fund is on track to return all of the pension fund's capital originally invested into the commingled fund.

The Carlyle Group is aiming for a total equity raise of $1.5bn for Realty Partners VI. 

The real estate manager will be putting co-investment capital into the commingled fund, approximately 3% of the total commitments for the fund.

Ohio School Employees said the projected gross internal rate of return for the fund was 20% over an eight-year holding period.

Realty Partners VI is being marketed as an opportunity fund. There are no assets in the fund now.

It will be investing in a variety of property types, focusing on transactions in major markets across the US.

The commitment in Realty Partners VI is part of the pension fund's real estate investment plan for fiscal 2011 to place as much as $125m into the asset class.

Most of this capital will be investing in a follow-on strategy with existing managers and putting some new capital into core open-ended commingled funds.

Ohio School Employees is approaching is 10% targeted allocation for real estate. Through the end of September, it had invested $874.5m in the asset class, or 9% of its $9.7bn of total plan assets.
 

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