Texas Employees plans real estate consultant search, commits $197 million

Texas Employees Retirement System, Austin, will begin a search for a new real estate consultant in mid to late May.

The move by the $25.6 billion pension fund is necessitated by the termination of RVK after the firm's entire real estate consulting team “left unexpectedly to start (their) own firm” in February, materials from a Feb. 22 board meeting showed.

Aon Hewitt Investment Consulting, the plan's general investment consultant, was appointed to oversee the fund's $2.4 billion real estate portfolio in the interim, said Betty Martin, director of investment services, in an email.

Aon Hewitt, which has a global real estate consulting team, will be permitted to bid on the real estate consultant RFP, which will be posted on the fund's website.

Ms. Martin said the deadline for proposals and other details remain to be determined, but noted that finalists likely will make presentations to the board at its December board meeting.

Separately, the pension fund committed a total of $197 million to three private equity funds and three real estate funds in February, according to a transaction report.

Riverside Europe Fund V, managed by Riverside Co., received a $42 million commitment for buyout deals with middle-market companies across Europe.

Two co-investments with existing ERS private equity managers, which were not identified, received $20 million each.

In real estate, the plan committed $50 million to DRA Growth & Income Fund IX, a value-added fund managed by DRA Advisors; $40 million to Wheelock Street Real Estate Fund V, an opportunistic fund managed by Wheelock Street Capital; and $25 million to Pennybacker IV, a value-added fund managed by Pennybacker Capital.