UNITED STATES - State Universities Retirement System of Illinois has entered into the opportunistic real estate space by making a $40m (€29.4m) commitment to the Dune Real Estate Fund II.
The pension fund believes there will be many interesting investment possibilities during 2009 in the opportunistic sector with all of the financial difficulties facing many property owners.
Daniel Allen, chief investment officer for Illinois State Universities, said: "This is the first commitment we have made to an opportunistic commingled fund. Our long range plan is to find another commingled fund with an opportunistic strategy in the near future."
Illinois State Universities made the investment decision along with the assistance of its consultant, Ennis Knupp + Associates.
The pension fund is expecting to achieve a net internal rate of return close to 20% range for its commitment to the Dune Real Estate fund.
Dune Capital Management has so far raised $1.25bn of equity for the latest vehicle.
The investment strategy calls for the manager to place capital into all of the major property types, both in the United States and Europe.
Meanwhile, Illinois State Universities continues to deliberate over appointing a real estate fund of funds manager and aims to bring two candidates before the board sometime during the first quarter of 2009.
Illinois State Universities is making the search in conjunction with two other pension funds - Illinois State Board of Investments and Public School Teachers' Pension and Retirement Fund of Chicago - all of whom have agreed to commit $75m each.