DECEMBER 11, 2013

Pennsylvania SERS makes $25m follow-on commitment

by Andrea Waitrovich

The $25.7 billion Pennsylvania State Employees’ Retirement System has made a $25 million follow-on commitment to Lubert-Adler Real Estate Fund VII, managed by Lubert-Adler.

Lubert-Adler Real Estate Fund VII launched in 2012 with a hard cap of $850 million. A final close is expected in May 2014. The firm held a first close in June, raising $75 million. The value-added/opportunistic fund will focus on investing in middle-market retail, multifamily, hotel and industrial assets exclusively in the United States through joint ventures with operating partners.

Pennsylvania SERS made previous commitments to the fund series, starting with Lubert-Adler Real Estate Fund II, and also made investments in Lubert-Adler Real Estate Fund III, Lubert-Adler Real Estate Fund IV, Lubert-Adler Real Estate Fund V and  Lubert-Adler Real Estate Fund VI.

The commitment further focuses investments in the separate account real estate portfolio, helping to increasePennsylvaniaSERS’ control and liquidity options, and reduce fees as outlined in the retirement system’s 2012–13 Strategic Investment Plan. 

Pennsylvania SERS’ 2012–13 Strategic Investment Plan includes increasing the liquidity of the private real estate sub-asset class; continuing to limit investments in real estate limited partnerships to unique and/or global strategies that cannot be accessed through separate account investments; focusing new investments in the separate account real estate portfolio to increase the retirement system’s control and liquidity options, and reduce fees; increasing liquidity of real estate separate accounts by limiting investments in joint venture operating partners and focusing on wholly owned, operating properties; and reducing the size of the real estate sub-asset class from its current 10 percent of fund assets to 6 percent of the portfolio, or approximately $900 million.

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