PSERS makes first commitment to Paramount Group

The $51 billion Pennsylvania Public School Employees’ Retirement System (PSERS) has approved a $100 million commitment to Paramount Group Real Estate Fund VII, a value-added fund managed by Paramount Group.

Paramount Group declined to comment on the commitment.

This is PSERS’ first commitment to the fund series. Paramount Group Real Estate Fund VII launched in June 2011 and seeks to raise approximately $1 billion of equity by the end of 2013. It invests in office buildings, particularly located in New York City, San Francisco and Washington, D.C. The vehicle has raised approximately $300 million as of January 2013.

In addition, PSERS made a $100 million commitment to Blackstone Real Estate Debt Strategies II, a value-added real estate debt fund managed by the Blackstone Group. The pension fund has been active with various Blackstone vehicles. PSERS previously committed approximately $200 million to Blackstone Real Estate Partners V in January 2006, approximately $400 million to Blackstone Real Estate Partners VI in January 2007, approximately $300 million to Blackstone Real Estate Partners VII in June 2011, and approximately to $270 million to Blackstone Real Estate Partners Europe III in March 2008.

And PSERS also invested an additional $100 million in its Private Markets and Real Estate In-House Co-Investment and Secondary Program. The board originally invested $100 million in the program in January 2012.

PSERS’ recent real estate commitments include $75 million each to Latitude Management Real Estate Capital III and LEM Real Estate High-Yield Debt and Preferred Equity Fund III .

PSERS has a target allocation to real estate of 13 percent, with an actual allocation of 12.8 percent as of Sept. 30, 2012.