NYS Common makes $150m Landmark RE bet

The fund has committed to Real Estate Partners VIII, its second Landmark investment in as many months.

New York State Common Retirement Fund has committed $150 million to Landmark Real Estate Partners VIII, according to its May transaction report.

No placement agents were involved, the report said.

This follows a $200 million commitment announced in NYS Common’s April report to Landmark Equity Partners XVI, the fund manager’s latest flagship secondaries fund.

Landmark Real Estate Partners VIII was launched in the autumn of 2016 with a target of $2 billion and a hard-cap of $2.75 billion. This makes it the largest ever of its class and twice the size of Fund VII, which closed on hard-cap of $1.6 billion in May 2015 after 14 months of fundraising, according to data from sister publication Private Equity Real Estate.

Fund VIII held a first close in December on $260 million and an additional close in February on $505 million, according to documents prepared for the Connecticut Retirement Plans and Trust Funds.

The fund will invest mainly in “non-control, minority limited partner positions in commingled funds”, the documents revealed. Around 30 percent of the fund is set to be invested outside the US, with transaction sizes ranging from $1 million to $1 billion.

Landmark is seeking internal rate of return of between 14 and 16 percent, according to the documents, and has a 1 percent management fee, eight percent preferred return and 12 percent carried interest.

CRPTF committed $65 million to the fund and New York State Teachers’ Retirement System $150 million. In June, Arkansas Teachers’ Retirement System committed $25 million. Its executive director George Hopkins told Secondaries Investor, “ATRS tries to speak little and make money… That is why ATRS invests in Landmark and appreciates the secondaries market.”

According to the documents prepared for CRPTF, predecessor Landmark Real Estate Partners VII closed deals averaging $46 million in size and generated a net internal rate of return of 36.7 percent as of 31 December 2016.

There were at least four dedicated real estate secondaries funds in the market seeking a combined $5.5 billion as of May, according to PERE. These include Metropolitan Real Estate Partners Secondaries Fund II, which is seeking $1 billion, and Partners Group Real Estate Secondary 2017, which is understood to be seeking at least $2 billion.