NOVEMBER 26, 2013

Montana Board invests $55m in value-added

by Andrea Waitrovich

The $8.9 billion Montana Board of Investments has increased its exposure to noncore strategies, approving two commitments to value-added funds at its Nov. 19 meeting.

The board invested $25 million in DRA Growth and Income Fund VIII, a billion-dollar fund managed by DRA Advisors. The vehicle was launched in May with a $1.35 billion fundraising goal. It held a $446.5 million initial close in October. DRA Fund VIII invests in big-box retail, CBD office, community shopping centers, industrial, mixed-use, multifamily, power center retail, suburban office and warehouse properties in the United States.

The second value-added investment was with BPG Investment Partnership IX, managed by Equus Capital Partners, in which Montana Board of Investments invested $30 million. BPG Investment Partnership IX has a $250 million fundraising goal. It was scheduled to hold a final close in September, but an official announcement has not been made.

The Equus Capital Partners fund held a fifth close in April with $157.2 million, at which time the fund had $63 million of its capital invested across seven assets in the United States. The fund acquires a mix of office, multifamily and industrial properties across the United States, and current investments are in Northern Virginia, the Philadelphia area and Scottsdale, Ariz.

The Montana Board of Investments has $818 million, or 9.2 percent, invested in real estate with a 6 percent to 10 percent target. The allocation range for value-added is 20 percent to 45 percent. Currently, the exposure to value-added is approximately 36.8 percent of the real estate portfolio.

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