Wisconsin buys $231m RE portfolio

State of Wisconsin Investment Board is expanding its interests in existing commingled funds through the purchase of stakes in eight vehicles for $231 million, sister publication PERE has learned.

Madison, Wisconsin-based SWIB invested a total of $608 million in real estate from 8 June through 1 September. Of that capital, $231 million went to purchasing additional stakes in eight real estate funds, a spokeswoman for the pension told PERE.

SWIB invested the most capital with Blackstone, buying into three of the firm’s real estate vehicles for a total of $69.3 million. The pension system purchased stakes in two of its most recent global opportunistic funds, Blackstone Real Estate Partners VIII and VII, and one US opportunistic separate account. SWIB had previously invested a total of $500 million in the two funds and another US opportunistic separate account, according to PERE data.

SWIB also invested $61.5 million with Westbrook Partners across the firm’s three most recent global vehicles, Westbrook Real Estate Funds VIII, IX and X. The pension system has invested an undisclosed amount in the value-added funds.

SWIB also bought stakes in two of Beacon Capital Partners’ latest North America-focused value-added vehicles, Beacon Capital Strategic Partners VI and VII. The system had originally committed a total of $225 million to the vehicles.

A spokeswoman for SWIB declined further comment.

SWIB has been an active seller on the secondaries market, disposing of buyout stakes in funds managed by Charterhouse Capital Partners, 3i, Graphite Capital, BC Partners and others. It is unclear whether this is SWIB’s first acquisition on the secondaries market.

The pension system managed $6.1 billion in real estate as of 31 July, with 71 percent of its portfolio in core, 15 percent in value-added and 13 percent in opportunistic holdings.

Real estate secondaries transaction volume hit $4 billion in the first half of 2017, driven by large transactions and an increase in dedicated dry powder during the first six months of the year, according to a report from Greenhill Cogent.

“The market is on track to meet or exceed the record $7.5 billion of real estate transaction volume in 2015,” Greenhill noted.

Other public pension plans that have acquired real estate fund stakes this year include California Public Employees’ Retirement System. In May the US’s largest public pension said it committed $75 million to consolidate its stake in CIM Urban Real Estate Fund, a vehicle to which it originally committed $125 million in December 2000, PERE previously reported.