CalPERS Committed $1.85B to Two Real Estate Debt Funds in Q1 2023

The California Public Employees’ Retirement System (CalPERS), which manages $462.8 billion in assets, committed $1.85 billion to real estate debt funds in the first quarter of the year.

The Blackstone Real Estate Debt Strategies V fund received a $1.5 billion commitment in March. Housed in Blackstone’s real estate unit, the strategy grew in the second quarter as the firm’s fifth real estate debt strategies fund totaled $3.7 billion.

The closed-end fund, which is seeking $8 billion of capital, will pursue property-related investments in public and private debt around the world, with a focus on the US.

The Mesa West Real Estate Income Fund V closed in February with $1.37 billion in assets of which CalPERS accounted for $350 million. The fund invests in loans secured by value-add/transitional commercial real estate assets throughout the U.S.

The fund’s manager, Mesa West Capital, a division of Morgan Stanley, has seen increased demand due to regulatory changes resulting from the Global Financial Crisis and the current volatility and dislocation in the capital and property markets.

Other debt-related investments by the pension fund included The OHA CA Customized Credit Fund, which saw a $1 billion allocation. Managed by New York-based Oak Hill Advisors, the fund is a special situations vehicle.

Ares Management’s Ares Senior Credit Investment Partnership saw a $500 million commitment. For the year ending June 30, Ares said it had closed on about $20.2 billion in direct lending commitments across 181 transactions.