Virginia Retirement Adds $275M to Real Estate, Credit

The Virginia Retirement System (VRS) in Richmond added a real estate and credit fund to its portfolio last month, according to recently released investment disclosures from the $105 billion pension system.

VRS added a $125 million commitment to Meadow Real Estate VI. The fund is managed by Meadow Partners, which is aiming for a $600 million raise, and is a closed end commingled fund investing in opportunistic real estate in select global gateway cities. The fund will primarily invest in CBD office, industrial, multifamily and retail properties.

Real assets investments generated a net return of 1.7% during the past fiscal year, outperforming its benchmark of -0.7%. Over the past three, five and 10 years, real assets investments have yielded net annualized returns of 11.2%, 8.4% and 10%, respectively, outperforming their respective benchmarks of 7.6%, 6.4% and 8%.

As of June 30, VRS had 13.5% of its portfolio invested in real assets.

In the credit portfolio, the Orchard Global EleganTree III was selected for a $150 million commitment. The closed-end fund managed by Orchard Global invests in regulatory capital relief transactions.

The new commitments follow a busy summer for the pension system that allocated over $2 billion in recent months across private equity, real assets and risk-based assets.