Investors - JUNE 30, 2014

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Pennsylvania Teachers commits to real estate debt, natural gas

by Reg Clodfelter

Pennsylvania’s Public School Employees’ Retirement System has committed $150 million to real estate debt through Varde Partners’ Scratch and Dent Fund, as well as $100 million to natural gas through Natural Gas Partners’ Natural Resources XI.

According to documents from PSERS, the Varde Scratch and Dent Fund will invest in commercial real estate loans with high loan-to-value ratios, low debt-service coverage ratios and/or occasional missed payments. The fund will focus on loans backed by office, industrial, retail and niche properties, such as car washes, gas stations and auto repair shops, under $25 million, and often lower than $5 million. The manager expects apartment and hotel loans to play a limited role in the portfolio. The fund is expected to formally launch in early third quarter 2014 and achieve r

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