Maine Public Employees Retirement System has made its first investment in a dedicated senior housing fund.
The US pension fund said it will commit up to $50m (€45.7m) to Senior Housing Partnership Fund V.
Prudential Real Estate Investors (PREI), known as Pramerica Real Estate Investors in Europe, is managing the fund and is investing while there is supply-demand imbalance for US senior housing.
Construction of senior housing has dropped significantly since the financial crisis, while the number of 75-year-olds is growing.
The manager is targeting a $500m raise for the fund, according to Maine PERS documents. PREI declined to comment.
PREI will co-invest 1% of total capital commitments, or no more than $10m.
Limited partners in Fund V are projected to achieve net returns of 10% to 14%.
While most deals will be in the US, up to 20% of the portfolio can be in Canada.
PREI will invest in a variety of senior housing assets, including for-rent, for-profit, private-pay independent and assisted living and memory care assets.
Fund V will buy existing assets or forward equity commitments on newly built properties.
Maine PERS has also allocated $100m to the US Farming Realty Trust III, a fund managed by the International Farming Corporation. The manager, which did not comment, invests in US farming and agricultural assets.