Investors - MARCH 4, 2014

MainePERS approves potential $25m secondary investment

by Reg Clodfelter

At a recent board meeting, the $12.2 billion Maine Public Employees Retirement System authorized an acquisition worth up to $25 million for a limited partner position in Westbrook Real Estate Fund IX, managed by Westbrook Partners. The acquisition is contingent upon MainePERS finding a seller. Andrew Sawyer, CIO at MainePERS, has confirmed the authorization.

If MainePERS is able to find a seller, this will be the retirement system’s first ever acquisition of a real estate secondary position, though it has made similar investments in private equity funds.

WREF IX closed in October 2012 after raising $1.6 billion in just one year of marketing. The value-added fund will invest in all asset classes in markets including London, Los Angeles, New York City, Paris, San Francisco, Tokyo and Washington, D.C. It will seek to invest primarily in existing properties as opposed to development deals, and aims to achieve a gross IRR of 18 percent.

MainePERS recently exceeded its previous peak of $11.6 billion in assets under management, achieved in October 2007. It is now nearly double its post-crisis trough of $7.1 billion from February 2009. The retirement system has a current allocation to real estate of approximately 7 percent and a target allocation to real estate of 10 percent.

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