Landmark RE edges towards planned Q1 close

Landmark Partners‘ latest real estate secondaries fund has edged closer to an expected close before the end of this week with a commitment from a California pension fund.

Kern County Employees’ Retirement Association, which has $4 billion in assets under management, has approved a commitment of between $50 million and $60 million to Landmark Real Estate Partners VIII, executive director Dominic Brown confirmed in an email.

It is not clear which factors will dictate the exact size of the commitment.

This is the pension’s first commitment to a Landmark fund and its first secondaries investment.

KCERA has target allocations of 5 percent to private equity and 10 percent to private real estate, according to its 2017 annual report. Its existing private equity portfolio consists of seven funds of funds managed by Abbott Capital and Pantheon Ventures.

Real Estate Partners VIII launched in the second half of 2016 with a $2 billion target, as Secondaries Investor reported. It surpassed this target in December, collecting at least $2.4 billion after around 14 months in the market.

Investors include Connecticut Retirement Plans and Trust Funds with a $65 million commitment, Minnesota State Board of Investment with $150 million and New York State Teachers’ Retirement System with $150 million, according to data from sister publication PERE.

Landmark is targeting a 14-16 percent net internal rate of return for Fund VIII. It has a 1 percent management fee, 8 percent preferred return and 12 percent carried interest.

The firm is is expecting to hold final closes on this fund and its latest private equity fund at the end of March, according to Aidan Riordan, head of affiliate management at parent company Old Mutual Asset Management, speaking on a third quarter earnings call on 2 November.

According to a half-year report from advisor Greenhill Cogent, $4 billion-worth of real estate secondaries traded in the first six months of this, equivalent to the volume for all of 2016.