UNITED STATES - The State Universities Retirement System of Illinois has allocated $75m (€50.1m) for a fund of funds investment strategy with Franklin Templeton Real Estate Advisors.

"We are creating a pretty unique investment initiative with two other pension funds: Illinois Municipal Retirement Fund and Public School Teachers' Pension and Retirement Fund of Chicago," said the fund's chief investment officer Dan Allen. "It's pretty rare in our industry for three pension funds to come together on a strategy like this."

Allen suggested the move would create diversification for all parties involved, as he added: "We will be able to invest in a great deal of different investment funds than we ever would have been able to do by ourselves."

Illinois State Universities is projecting it will achieve a net IRR in the region of 12-15% through its fund of funds investments, although the pension funds and Franklin Templeton have yet to work out how much capital might be placed in each commingled fund.

The total amount of equity invested by all three pension funds in this project is approximately $200m.

Illinois Municipal has made a $75m allocation to the strategy following a meeting of its pensions board on 23 October.

Franklin Templeton will now seek out the first investment over the coming month via a US-based real estate commingled fund of funds.