Investors - MAY 29, 2013

South Carolina invests in opportunistic real estate funds

by Andrea Waitrovich

The $27.3 billion South Carolina Retirement System Investment Commission (RSIC) has committed $75 million each to two separate opportunistic real estate funds.

RSIC, which invests on behalf of the South Carolina Retirement Systems, invested $75 million in Oaktree Real Estate Opportunities Fund VI (ROF VI), managed by Oaktree Capital Management. ROF VI was launched in May 2012 with a $1.5 billion fundraising goal. It will invest in distressed properties in the United States. ROF VI has raised $710 million as of May 17.

In addition, RSIC committed $75 million to Brookfield Strategic Real Estate Partners, managed by Brookfield Asset Management. Brookfield Strategic Real Estate Partners is a global opportunistic fund, which launched in July 2012 with a $3.5 billion fundraising goal. The fund held a $2.4 billion close in 2012. The investment vehicle will be in the market to acquire office, retail and multifamily properties. Approximately 60 percent of its investments will target the United States, and the remainder will be in Europe, Brazil and Australia.

RSIC is undergoing a recommendation of increasing its real estate allocation to 5 percent from 3 percent. Real estate is part of the pension fund's real assets portfolio. RSIC aims to create a risk-efficient portfolio that maximizes potential funding status, minimizes contributions and minimizes downside risk of investment losses. The increase will begin on July 1, the start of the fund's fiscal year.

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