Teacher Retirement System of Texas has committed $200m (€143.6m) to a value-added CBRE Global Investors fund.

The allocation to US Value 7 makes up 13.3% of the $1.5bn projected total capital raise. Leveraged at 60%, the fund will have a total capitalisation of $3.7bn.

The fund has respective gross and net leveraged IRRs of 15% and 12.8%. CBRE Global Investors is providing a 2% (around $30m) co-investment.

US Value 7, which will invest in US properties, has two investment strategies. Part of the portfolio – up to $1bn – will be made up of repositioned and re-let office, industrial, retail and hotel properties. The remainder of the portfolio will be apartments, with a preference for high-density with limited obsolescence.

The fund will add value to non-stabilised properties through asset management and rehabilitation.

Texas Teachers has invested $919 with CBRE Global Investors since 2008, with most of the capital invested in value-add and opportunistic funds, and development ventures.