The South Carolina Employees Investment Commission has approved $200m for new real estate commitments, half of which will be invested in the Torchlight Investors Debt Opportunity Fund V.
Torchlight will invest 35% of funds in securitised debt, 20% each in stapled mezzanine, distressed senior mortgages and mezzanine loans/B-notes and 5% in preferred equity, according to a report in IP Real Estate.
The fund has a targeted 13-15% net IRR, with a planned $1bn total equity raise and the manager will co-invest either 1% of committed capital or $10m.
Torchlight’s 20-year investment history in commercial real estate debt was one of the reasons behind the selection, according to the US pension fund, which allocated the other $100m to the Crow Holdings Realty Partners VII fund, a value-add real estate fund.
Dallas-based Crow is seeking $1.5bn for Partners VII, 50% more larger than its Fund VI, and will co-invest $100m, targeting an 11% net IRR in primary and secondary Sun-Belt markets.
Crow is targeting cash-flow investments — apartments, shopping centres, industrial and convenience stores/gas stations — for 70% of the portfolio. The remainder will be made up of more value-orientated transactions, including office buildings and hotels.
The pension fund said the investments complement its other other value-add real estate managers, including Brookfield, Greystar Real Estate Partners and TA Associates Realty.