California State Teachers Retirement System (CalSTRS) has hired Principal Real Estate Investors as its first real estate investment trust (REIT) manager.

The $229bn pension fund told IPE Real Assets that it has awarded a $100m (€89.2m) account, which it said would provide “liquidity for the real estate portfolio” and is “part of the real estate industry in which CalSTRS had not yet invested in”.

At the end of last year, the pension fund’s real estate portfolio stood at $31.4bn. CalSTRS has set the maximum equity investment for public real estate within the real estate portfolio at 15%.

Principal will have investment discretion to invest in public REITs in the US and will be benchmarked by NAREIT.

The public real estate strategy for CalSTRS also includes making equity investments in real estate operating companies.

It recently completed a deal to acquire a majority stake in US residential platform Fairfield Residential from Brookfield Asset Management.