New York State Common Retirement Fund (NYSCRF) has expanded its emerging managers programme by earmarking $500m (€367m) for small and start-up real estate entities in the US.
The pension fund will target companies that have been in business for less than 12 years, have up to $1bn in assets under management and have not raised more than three institutional funds.
The investments will be made via a separate account managed by Artemis Real Estate Partners.
NYSCRF Mach II follows on from a NYSCRF Mach I, a $300m separate account set up in 2011 also managed by Artemis.
According to the pension fund, the emerging manager programme will have sensitivity to minority and women-owned businesses.
Mach II will make a mixture of debt and equity investments with managers across the country and market sectors.
It will consider deals in primary markets and some select secondary markets, and will not be limited to the top 30 metropolitan statistical areas (MSAs).
The pension fund stated that it would be targeting gross returns of between 10% and 12.5%.
The total capitalisation for the new separate account could reach $900m when accounting for a maximum leverage level of 55%.
Mach I invested in a number of companies, including Ellis Partners, a specialist in office and apartment properties in the greater San Francisco Bay Area. It also invested with managers specialising in retail and office in Southern California, office buildings in Washington, DC, and debt and mezzanine deals across the country.
