Arizona State Retirement System has finalised a $500m (€471.5m) expansion of its investment relationship with H/2 Capital Partners.
The investments include a $350m separate-account commitment to H/2 Strategic Partners.
The pension fund said the general investment strategy for the account was to invest in liquid commercial real estate and related credit sectors.
All capital will be invested in the US, with the manager having full investment discretion.
Arizona State is expected to target assets offering an 8% net IRR.
A $150m investment to the H/2 Special Opportunities IV fund was also made.
The fund is focused on US assets with high-quality real estate debt.
Arizona State does not believe that trends in the current real-estate-debt market make it an attractive sector in which to invest.
As of September, the pension fund had a real estate portfolio valued at $3.1bn, or 9.1% of total plan assets.
The targeted allocation for the asset class is 10%.
Arizona State has previously given $150m to H/2’s Special Opportunities II, $200m to Special Opportunities III and $400m to H/2 Core Real Estate Debt Fund.
