Texas Permanent School Fund, Austin, committed a total of $115 million to two real estate funds.
A commitment of up to $75 million to DRA Growth & Income Fund IX was approved by the Texas State Board of Education, Austin, during a Friday meeting. The board oversees investment of the $30.2 billion endowment.
The recommendation was made by the Committee on School Finance/Permanent School Fund at a meeting Thursday, a webcast showed. The endowment committed $75 million to the previous value-added real estate fund in the family managed by DRA Advisors.
A $40 million commitment to a real estate co-investment managed by one of the fund’s existing managers was also approved by staff since the last meeting, B. Holland Timmins, executive administrator and chief investment officer, told committee members, according to the webcast.
The identity of the co-investment manager is confidential, said Steven C. Novick, chairman, principal and chief operating officer of Courtland Partners, the fund’s real estate consultant, during Thursday’s committee meeting. He added that the core-plus real estate strategy is “a good tactical fit” for the fund’s $2.1 billion real estate portfolio because it is focused on investment in fully-leased logistics warehouses on the U.S. West Coast.
The board of education also approved the committee’s recommendation to amend the fund’s real estate policy to grant decision-making authority to staff regarding co-investment opportunities offered by the fund’s existing real estate managers between meetings. The permanent fund’s gross returns have topped those of its policy benchmark for annualized returns for all periods ended Sept. 30: three months, 3.6% (benchmark, 3.2%); one year, 10.5% (9.9%); three years, 5.6% (5.2%); five years, 9.1% (8.7%); and 10 years, 5.6% (5.3%).
