Chicago-based LaSalle Investment Management has been mandated by the Teacher Retirement System of Texas pension fund (TRS) to invest $205 million into real estate. It is the latest sign that separate accounts are growing in popularity among big-ticket investors.
According to an announcement by LaSalle today, the pension fund has mandated the firm to invest initially on a North American basis and eventually on a global basis. The fund will co-invest in opportunities sourced by LaSalle and from existing partners of TRS.
TRS has previously invested as a limited partner in funds managed by private equity real estate firms including The Blackstone Group, Colony Capital, RREEF, Walton Street Capital, Westbrook Partners and The Carlyle Group, according to PERE Connect, PERE’s sister database website.
LaSalle is expected to also commit a proportion of the capital to projects with firms in which TRS does not have an existing relationship.
The firm said: “The fund will identify compelling macro-level strategies for the coming two-three year period and then pursue top-performing GPs with expertise in the targeted strategies. LaSalle expects the fund to be able to capitalize on attractive opportunities given the current shortage of capital in the marketplace for real estate investments.”
The mandate by TRS comes amid a growing trend of large investors which are investing directly through structures such as separate accounts. Last month for example, The National Pension Service of Korea mandated London-based Rockspring Property Investment Managers to invest in assets in London as part of a wider strategy to commit $3 billion to real estate in major international cities on a direct basis.
As of August 18, TRS had $70.6 billion in funds under management, 4 percent of which was allocated to real estate, equal to approximately $2.82 billion. The pension fund is keen to grow its real estate allocation to 10 percent.