The Employees Retirement System of Texas (ERS) approved capital commitments worth a total of $246 million to global fund managers, including Invesco, in March.
The $31.3 billion pension fund approved an allocation of $75 million to Invesco Real Estate Asia Fund. The latest commitment was a follow-on investment in the core, open-end realty fund, ERS said in an investment report.
Another pension fund, Teacher Retirement System of Texas, had in March 2020 approved a $100 million commitment to Invesco Real Estate Asia Fund IV, followed by another $50 million to a sidecar vehicle two months later.
Invesco is understood to have held the first close for the fund and its sidecar vehicle at $500 million. Maine Public Employees Retirement System had also backed the fund.
Invesco’s fourth Asia real estate fund targets core and core-plus investments across the Asia Pacific region, with a key focus on major cities in Australia, Japan, and Korea.
In March, ERS also committed A$27.36 million ($21.15 million) to QIC Global Infrastructure Fund and $25 million to ERS Private Equity Emerging Manager III, a 2019-vintage fund of funds managed by Barings under ERS’s Emerging Manager programme.
Other commitments ERS made in March were into undisclosed co-investment vehicles in infrastructure, real estate and private equity.
Australia-based QIC is an investment manager founded in 1991 by the Queensland government to invest in alternative assets with a focus on infrastructure, real estate and private capital. The firm managed A$85 billion ($65 billion) in assets by the end of last year.
Within ERS’ Emerging Manager programme, which invests in private investment managers with assets under management of $2 billion or less, ERS Private Equity Emerging Manager III provides seed and strategic capital to emerging private equity managers with less than $500 million in assets under management.
ERS had committed its first $25 million to ERS Private Equity Emerging Manager III by August 2020. The first fund in the series was a $50 million mandate, followed by a $25 million Fund II.
“As a subset of the strategy, Barings focuses on investing with first-time funds and anchoring first closes,” ERS said in a September 2020 update, adding that Barings made five investments totalling $12.9 million in commitments during the calendar year 2020, including investments in healthcare, information technology and energy.
As of August last year, ERS has invested $475.5 million in private equity through its Emerging Manager programme and has generated a net internal rate of return (IRR) of 12.38%.
For this calendar year, the pension fund said it targeted to score four to six new investments in lower middle-market buyouts and growth emerging managers.
As of February this year, ERS had a 16% allocation to private equity, 11% to real estate, and 4% to infrastructure.