The Illinois State Board of Investment is expecting to invest up to $200m (€185m) in real estate investments in 2016.
Bill Atwood, executive director at the pension fund, said Illinois had satisfied the core target for its real estate portfolio and last year increased its non-core allocation from 15% to 35%.
Capital planned for this year will be invested in non-US real estate and debt.
Debt investments will either provide new debt on existing properties or for the purchase of distressed debt.
All new investments for the year will be done in limited partnership structures.
Typical commitments will be between $30m and $50m.
The pension fund has a real estate portfolio valued at $1.5bn and is close to its 10% targeted allocation for the asset class.
The pension fund is looking to expand its global real estate portfolio to as much as 20% of the overall portfolio.
As of June of last year, it had invested $90m, or 5.9% of its real estate assets, in this sector.
To reach the 20% target, the pension fund would need to invest up to $305m.
Illinois has also approved two new real estate investments totalling $100m, with $50m allocations to the Westbrook Real Estate Fund X and the Madison International Realty Liquidity Fund VI.
“A factor in our making these two commitments is that it will allow us to gain exposure into more international real estate,” Atwood said.
“This is something we want more of in the future, as it will lead the pension fund to achieve more diversification in its overall real estate portfolio.”
Westbrook Partners will invest in debt and equity in Europe and the US for Fund X.
Atwood said Madison’s Fund VI aimed to take ownership positions in existing properties.
“These are typically less than a controlling interest,” he said.
“This does give a clear idea of what you are investing in, compared with a blind pool investment fund.”
No comments yet