The Teacher Retirement System of Texas (TRS) earmarked $200 million to an existing real estate manager in July, according to a new commitment document that the pension plan released Monday.
The $200 million commitment to Square Mile Capital Management, will be split equally between the New York-based firm’s fifth fund and an accompanying sidecar vehicle, reports PDI sister title PERE.
Similar to the previous funds in the series, Square Mile’s latest opportunistic vehicle will focus on distressed debt backed by all real estate property types across the US. The firm plans to invest in equity, recapitalisations and special situations as well, sources told PERE. The firm is understood to be seeking commitments largely from public pensions, sovereign wealth funds and other institutional investors. The firm currently manages about $3 billion in assets. Square Mile declined to comment.
TRS is the lead investor in the fund, which has a $750 million target excluding co-investments, no hard-cap and a gross return target ranging from 15 percent to 20 percent, according to PERE’s sources. PERE understands that it will begin to formally market Square Mile Partners V in the early fall.
Square Mile launched Square Mile Partners IV at the end of 2012 and closed the fund at the end of 2013 on about $800 million, including co-investments. TRS had committed $100 million to that vehicle as well.
TRS managed $128.5 billion in total assets as of 31 August, according to its website. The pension system has committed $2.5 billion to real assets to date in 2016.