New Jersey Division of Investment joins forces with TPG on real estate fund

New Jersey Department of Treasury's Division of Investment, Trenton, which manages the state's $71.8 billion pension system, will invest $350 million in a separate account managed by TPG Real Estate, confirmed Andrew Pratt, a spokesman for the Treasury Department.

TPG Real Estate is a unit of private equity firm TPG Capital.

The separate account, TPG/NJ Partnership, will invest in “a range of real estate-related strategies, focused on both debt and real estate equity,” according to a memo from Timothy Walsh, division director, presented Thursday to the State Investment Council, which formulates investment policies for the division and consults with Mr. Walsh.

The fund's investment strategy will be primarily focused on real estate assets in the U.S. and Western Europe, the memo from Mr. Walsh said.

The memo added that the division “has been offered the opportunity to review all investments made by the fund prior to allocating capital.”

The division also terminated Pictet & Cie as an investment adviser for about $325 million in emerging markets equity investments, according to a report prepared by the division.

Pictet's performance “has lagged that of the other three (emerging markets) advisers,” according the division's report.

Pictet spokesman Stephen Barber said in an e-mail Friday that his company had no comment.

“Some of these assets will be added to the emerging markets passive portfolio, while two of the other advisers, Morgan Stanley (MS) and Lazard Freres, will provide advice for the remainder of the assets,” the report said.

Morgan Stanley will now advise on $700 million, and Lazard Freres, $900 million. Wellington Management advises on about $500 million in assets, according to the report.

The division has about $2 billion overall in emerging markets equities, the report said.