Key Takeaways
- • North Carolina's retirement system is expanding its Barings relationship with a $2.1 billion real estate debt and capital solutions mandate, per Institutional Investor.
- • Barings will deploy $1 billion in institutional-grade commercial real estate loans across North America and Europe, $800 million into its CMBS strategy, and $300 million into capital solutions focused on secured debt.
- • The new commitment follows prior commitments to Barings totaling more than $600 million and builds on a relationship of over a decade.
- • The investment authority cited expectations of persistent geopolitical stress, elevated long-term rates, and sticky inflation as reasons to favor listed infrastructure, natural resources, REITs, and shorter-duration high-yield real estate credit.
Summary
North Carolina's retirement system is expanding its partnership with Barings, committing $2.1 billion to real estate debt and capital solutions opportunities. The move comes as large allocators increasingly turn to specialist managers for niche opportunities, particularly overseas. The North Carolina Retirement System, with $147 billion in assets, has worked with Barings for more than a decade, and the new mandate follows prior commitments to the firm totaling more than $600 million.
Under the expanded mandate, Barings will deploy $1 billion into institutional-grade commercial real estate loans across North America and Europe. An additional $800 million will go to Barings' CMBS strategy, and $300 million will go to capital solutions, which provides customized financings for corporate and non-corporate issuers with a focus on secured debt. Barings, a $502 billion global alternative asset manager, managed about $2.5 billion in real estate debt mandates for the North Carolina Investment Authority as of the end of June, spanning real estate debt, special situation corporate debt, and transportation and other real assets.
North Carolina State Treasurer Brad Briner said in a statement that broadening the partnership should help keep the pension plan stable and secure. A spokesperson for the investment authority said the team expects persistent geopolitical stress, elevated long-term interest rates, and sticky inflation to make listed infrastructure, natural resources, REITs, and shorter-duration, high-yielding real estate credit more attractive than longer-duration investment-grade fixed income and high-yield corporate credit.
Barings has also partnered with state pensions in Maryland, Alaska, and Michigan on lower-middle-market local infrastructure investments. Separately, the California State Teachers' Retirement System recently expanded its relationship with emerging markets specialist ABS Global Investments from fund manager to investment partner.
Briner, who campaigned on modernizing the state's investments, overhauled the investment office after taking office, eliminating what he called outdated statutes, adding an investment advisory board, and rebalancing the portfolio. That rebalancing reduced the system's cash position from nearly $14 billion to about $4 billion.
Under the expanded mandate, Barings will deploy $1 billion into institutional-grade commercial real estate loans across North America and Europe. An additional $800 million will go to Barings' CMBS strategy, and $300 million will go to capital solutions, which provides customized financings for corporate and non-corporate issuers with a focus on secured debt. Barings, a $502 billion global alternative asset manager, managed about $2.5 billion in real estate debt mandates for the North Carolina Investment Authority as of the end of June, spanning real estate debt, special situation corporate debt, and transportation and other real assets.
North Carolina State Treasurer Brad Briner said in a statement that broadening the partnership should help keep the pension plan stable and secure. A spokesperson for the investment authority said the team expects persistent geopolitical stress, elevated long-term interest rates, and sticky inflation to make listed infrastructure, natural resources, REITs, and shorter-duration, high-yielding real estate credit more attractive than longer-duration investment-grade fixed income and high-yield corporate credit.
Barings has also partnered with state pensions in Maryland, Alaska, and Michigan on lower-middle-market local infrastructure investments. Separately, the California State Teachers' Retirement System recently expanded its relationship with emerging markets specialist ABS Global Investments from fund manager to investment partner.
Briner, who campaigned on modernizing the state's investments, overhauled the investment office after taking office, eliminating what he called outdated statutes, adding an investment advisory board, and rebalancing the portfolio. That rebalancing reduced the system's cash position from nearly $14 billion to about $4 billion.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.