The Cook County Pension Fund has chosen Adelante Capital Management as a domestic REIT manager.
The Illinois fund has made an initial $70m (€56.1m) allocation to the manager, with the possibility of increasing the amount in the future.
A contract is due to be signed in the coming months.
The pension fund is also looking for a non-core real estate manager with which to invest $60m.
Michael Torres, CIO at Adelante Capital, said the REIT allocation was part of its total-return strategy.
“We have had experience with this kind of strategy for 20 years,” Torres said, adding that the pension fund was likely to benchmark the allocation’s performance against the Wilshire REIT Index.
Adelante Capital had $2.3bn under management as of October.
Cook County will provide the funding for the REIT manager from a transitional US REIT index fund that had been managed by Russell Investments.
The selection of Adelante Capital was the end result of an emerging-manager search started in February.
At the time, the plan was to invest capital in either a fund-of-funds strategy or real estate securities.
Cook County conducted the search along with its investment consultant Callan Associates.
A final decision on a non-core manager should be made in the near future.
The $8.9bn pension fund has an 8% targeted allocation for real estate, investing in a mixture of core, non-core and REIT strategies.