- The Teacher Retirement System of Texas committed $150M to Pennybacker VII, a closed-end, value-add program of Pennybacker Capital investing in diversified U.S. property types.
- The fund has no fundraising goal yet, while its predecessor, Pennybacker VI, raised $1.6B in total equity, a reference point for the new vehicle.
- TRS manages $233.5B and targets a 15% real estate allocation, with $30.6B in real estate assets, so the commitment fits a sizable and ongoing allocation.
The Teacher Retirement System of Texas (TRS) committed $150 million to Pennybacker VII, a program of Pennybacker Capital.
The fund is a closed-end, value-add strategy investing in diversified property types across the United States.
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No Target Set Yet
A fundraising goal for Pennybacker VII has not been determined. Its predecessor, Pennybacker VI, raised $1.6B in total equity.
The fund is a closed-end vehicle, so capital is raised during a set fundraising period and then locked up for the term.
Who Is Pennybacker
Pennybacker Capital is an analytically driven value-add real estate private equity manager, according to Institutional Real Estate’s Ask IRE.IQ tool. It focuses on middle-market office, retail, multifamily and industrial assets in select growth markets.
A value-add strategy typically buys properties that need renovation or lease-up and aims to raise income and value over the hold period.
TRS’s Real Estate Footprint
As of March 31, TRS had $233.5B in total assets under management. Its real estate allocation target is 15%.
The system held $30.6B in real estate assets, which is about 13% of the total, per the same data.
Why It Matters
Large public pensions are still committing to value-add funds even as fundraising has been tight, as CRE Daily reported when real estate fundraising hit the third-lowest level in a decade. A $150M commitment from a $233.5B system is a signal of continued appetite for the strategy.
Other pensions are also writing commitments, including Pembroke Pines to an industrial fund.
What’s Next
Watch for Pennybacker to set a fundraising target for Pennybacker VII and for additional institutional commitments. TRS is also still working toward its 15% real estate allocation target.
