Oregon Investment Council, Tigard, which runs the $62.2 billion Oregon Public Employees Retirement Fund, Salem, committed $250 million to KKR North America Fund XI and $200 million to a domestic real estate separate account managed by Amstar Advisers, said James Sinks, council spokesman.
KKR North America Fund XI is a domestic buyout fund managed by Kohlberg Kravis Roberts & Co.. Oregon Investment Council committed $525 to the same fund in 2011.
“The Investment Council believes this is a good opportunity. Oregon has been investing with KKR since the early 1980s and the track record of the firm has been outstanding,” Mr. Sinks said in an e-mail. “The additional investment in the North America Fund will include better fee terms than the initial $525 million.”
Mr. Sinks declined to disclose the fee terms on the additional capital commitment. However, council staffers had negotiated lower fees on its initial $525 million commitment, which was expected to save at least $2 million.
The real estate separate account targets “restore-to-core” office properties in supply constrained areas with long-term growth potential and “develop-to-core” multifamily properties, involving development of core apartment buildings and other multifamily properties. Amstar also has a $200 million separate account with the $9.4 billion San Diego County Employees Retirement Association, according to a memo to the council for its May 29 meeting.
Separately, the Oregon Investment Council selected Pension Consulting Alliance as its new real estate consultant, replacing Arete Capital. The council issued an RFI in June 2011; Arete rebid. The council placed the search process on hold due to the resignation of Ronald Schmitz, chief investment officer, in October 2011. The council resumed the search in January, re-interviewing the three finalists, PCA, The Townsend Group and Courtland Partners. PCA’s term as real estate consultant is expected to begin July 1.
The council postponed a decision to invest $50 million in Solera Partners II, a private equity fund with a $350 million target and $500 million hard cap. The pension fund had invested $50 million in Solera’s first fund, a $245 million fund, but did not invest in a small annex fund raised after the 2008 crisis.
