Montana board commits $100m to two value-add funds

The Montana Board of Investments has committed $100 million to two value-add real estate funds, splitting the money evenly between DRA Advisors and Marcus Partners, according to Institutional Real Estate Inc. The commitments keep the pension's real estate sleeve near its 12 percent target and land with two managers whose recent funds cleared the targets they set.

$50 million goes to DRA Growth and Income Fund XII, a closed-end fund that launched in the first quarter of 2026 targeting roughly $2.25 billion. Its mandate spans office, industrial, multifamily and retail properties across the United States. The prior fund in the series closed with nearly $2.3 billion of equity, so the successor is being raised on the same scale as the vehicle institutions already backed. Marcus Capital Partners Fund V takes the other $50 million. Focused on industrial, multifamily and other select property types on the East Coast from Boston to Atlanta, the fund closed in March at $875 million in commitments, above its $750 million target and its $850 million hard cap; Marcus's Fund IV had raised $650 million against a $550 million target.

At Dec. 31, 2025, MBOI, a public pension fund, held $28.1 billion in total assets, $3.3 billion of it in real estate. A 12 percent allocation on those figures is roughly $3.37 billion, leaving the sleeve slightly under its policy mark before these commitments. The new $100 million is about 3 percent of the disclosed real estate book, making this allocation maintenance rather than a strategic pivot.

The choices follow the managers' fundraising records. Marcus Fund V has already drawn commitments beyond even its hard cap, and Fund IV finished a full $100 million above its original target. DRA's previous fund closed with nearly $2.3 billion, a number that has effectively become the template for the $2.25 billion ask. MBOI is not making a directional office bet; the DRA sleeve spreads across four property types and the Marcus vehicle leans industrial and multifamily.

For a state pension managing to a fixed real estate allocation, that is the less theatrical and more dependable route. The allocation gets maintained, the capital goes to managers the market has already endorsed, and the only open question left on the table is whether DRA's Fund XII will match the $2.3 billion its predecessor closed with.