N.C. Retirement Pumps $527M into PE, Real Estate

The North Carolina Retirement Systems invested $527 million in private equity and real estate funds in the fourth quarter of 2023, according to meeting documents.

The pledges, made in November 2023, follow more than $2 billion in capital flows to private equity and $1.6 billion to non-core real estate in 2023, making these asset classes the most active for the $181 billion pension system.

Ares Management received $200 million for its private equity fund, NCL Invest III – PE OOA. The strategy was not stated in the February 2024 investment committee meeting materials.

The additional investment in private equity is in response to the asset class’s 2.42% return for the calendar year 2023. Additionally, the state pension continues to allocate less than its objective of 7% to private equity funds.

The system’s core and non-core real estate programs were $6.4 billion and $2.1 billion, respectively. Both programs reported losses in 2023 of 13.7% for non-core and 9.3% for core real estate.

Northpond Partners received a $200 million commitment to Northpond Retail Investors, which will launch in November 2023 as an evergreen investment vehicle focusing on buildings with convenience, necessity, and service-oriented tenants. The Chicago-based company has been actively redeveloping real estate throughout the Southeast, especially the Carolinas.

In core real estate, Rockwood Capital’s NorthRock Core fund received a $127.3 million commitment. The strategy focuses on the urbanization trend in major US cities and aims to invest in rising urban and suburban areas near transit and infrastructure.