Oregon Investment Council puts $400 million toward alternatives

Oregon Investment Council, Tigard, which runs the $70 billion Oregon Public Employees Retirement Fund, committed $200 million each to Global Infrastructure Partners Capital Solutions fund and real estate joint venture Lionstone OPERF Real Estate One, managed by Lionstone Partners, said Michael Cox, spokesman, in an e-mail.

The council has invested with both managers in the past. The Global Infrastructure Partners fund will provide non-equity financing for 20 to 25 companies and projects ranging from $50 million to $250 million each. The Lionstone joint venture is a follow-on to another joint venture, Cash Flow Office One, which invested in office buildings. The new joint venture will invest mostly in offices, with about 20% of the fund going into other sectors such as multifamily and retail.

The joint venture will be split into two levels: a value added tranche seeded by three existing properties from Oregon's first joint venture with Lionstone worth $155 million and Oregon's new $200 million commitment. The second level will consist of core properties transferred from the first, value-added tranche. It will be seeded with nine properties from the first joint venture worth a total of $100 million.

Separately, the council adopted guidelines for a replacement fund for the $81 million Higher Education Endowment Fund. The Oregon University System is scheduled to dissolve on June 30, 2015, and all seven public universities will adopt independent boards on July 1. As a result, the system's fund will dissolve. Executives at a number of the universities are interested in pooling cash and investments in a new fixed-income fund to be called the Public University Fund that is to be managed by the Oregon State Treasury.