Fonds de réserve pour les retraites (FRR) has invested €200m in French intermediate housing as part of a change in strategy that will see it deploy €2bn in assets generating economic growth.

The €37.2bn French pension reserve fund invested in the intermediate housing fund launched last year by Société Nationale Immobilière, a subsidiary of Caisse des Dépôts et Consignations.

The intermediate housing fund (FLI) attracted €1bn from private institutions by its second, and last, close last year, including commitments from France’s public service supplementary pension fund ERAFP.

FLI, once leveraged, will be able to invest €1.8bn in French intermediate housing.

The €200m investment by FRR marks a change in strategy after it pulled back from illiquid assets in 2010, following a reform of the country’s pension system that required it to pay €2.1bn a year to towards the deficit in the social security system.

The change saw it halt investment in real estate and switch to a largely liability-driven investment strategy.

As part of the new €2bn strategy, FRR will also increase its private equity exposure and invest in infrastructure, according to Olivier Rousseau, a member of the fund’s executive board.

Rousseau said a “large portion” of the infrastructure exposure would come from green projects and that the investment in FLI would grow its exposure to assets that perform well from an environmental standpoint.