Alternatives briefs: CalSTRS extends First Industrial joint ventures

SACRAMENTO, Calif. — CalSTRS extended five of its joint venture agreements with First Industrial Realty Trust through December 2018, confirmed spokeswoman Sherry Reser.

The ventures include the $1.6 billion Development and Repositioning JV (FirstCal 1), the $1.6 billion Strategic Land and Development JV (FirstCal 3), the $1 billion 2005 Core JV (FirstCal 2), the $475 million FirstCal Europe JV and the $285 million FirstCal Canada JV.

The $158.7 billion California State Teachers' Retirement System, Sacramento, and First Industrial also extended the investment periods for the Development and Repositioning, the Strategic Land and Development, FirstCal Europe and FirstCal Canada joint ventures through December 2011.

Real estate manager CB Richard Ellis Investors is advising CalSTRS on the ventures.

ALBANY, N.Y. — New York State Common Retirement Fund, Albany, closed five real estate investments totaling $304.6 million in August, said Robert Whalen, spokesman for Thomas DiNapoli, state comptroller and sole trustee of the $153.9 billion fund.

The five investments are $300 million with Morgan Stanley Real Estate Fund VII Global and about $4.6 million for four affordable housing properties in New York state.

NEW YORK — Kohlberg Kravis Roberts posted a total investment loss of $1.1 billion for the six months ended June 30, down from a net gain of $3.4 billion in the first half of 2007, according to a prospectus the firm filed with the Securities and Exchange Commission.

At the same time, fee-related earnings for its private equity business grew to $72.8 million in the first half of the year from $12.5 million in the first six months of 2007.

Fixed-income fee earnings dropped to $21.3 million, from $38.4 million in the first half of last year.

KKR set a new record for private equity fees in calendar year 2007, earning $371 million, up from $140 million in 2006.

NEW YORK — Bank investments, not traditional leveraged buyouts, dominated private equity deals in the financial services sector for the six months ended June 30, according to a report released Sept. 23 by Freeman & Co.

Investments in bank and broker-dealers accounted for 44% of overall deal value, said Eric C. Weber, a managing director and COO of Freeman. The biggest deals included TPG's $2 billion April investment in Washington Mutual Inc., Seattle, and Corsair Capital's $985 million investment in National City Corp., Cleveland, in May.

NEW YORK — The pace of hedge fund liquidations is on track to reach 700 this year, up 24% from the 563 funds that closed in 2007 but below the previous high of 848 shuttered funds in 2005, according to second-quarter data from Hedge Fund Research.

HFR reported that 350 hedge funds closed in the first half of 2008, vs. 305 funds in the first six months of last year.

New hedge fund launches totaled 487 in the same period, HFR researchers said in a report. At that pace, 2008 will have the lowest number of new fund debuts since 2001.

“The environment of the last 12 months has been characterized by volatility, performance dispersion and asset consolidation toward the largest hedge fund firms. ... The top decile of funds has outperformed the bottom decile by more than 75%, the widest spread on record and a trend which is expected to continue,” said Kenneth J. Heinz, president of HFR.

Hedge Fund Research analyzed data from the more than 13,000 hedge funds in its database, including more than 7,800 funds that regularly report performance and asset data.

Hedge Fund Research estimated that more than 10,200 hedge funds were operating worldwide as of June 30, including more than 7,600 single-manager funds, managing a total of about $1.93 trillion.