San Diego County Employees Retirement Association committed $100 million to Brookfield Senior Mezzanine Real Estate Finance Fund, an open-end real estate credit fund managed by Brookfield Asset Management, according to a recording of the $12.4 billion pension fund's board meeting.
SDCERA has invested with Brookfield in the past. The fund is expected to make credit investments between senior debt and the equity portions of the real estate financings, a report to the board for its Jan. 18 meeting shows. As an early investor in the fund, SDCERA will get a discount on management fees, paying 90 basis points on net asset value rather than 100 basis points. There are no performance or incentive fees, the report noted.
The fund will have a two-year lockout period, after which SDCERA will be able to withdraw capital from the funds subject to a 90-day redemption period. SDCERA would be able to make additional capital contributions on a quarterly basis.
The fund has so far raised between $400 million and $500 million, with a $1 billion hard cap. The fund is expected to raise new capital annually depending on market conditions.
SDCERA had a 7.9% allocation to real estate as of Nov. 30; its real estate target is 9%.