UNITED STATES - Maryland State Retirement Agency has made its first move into investing in international real estate with a $100m (70.2m) commitment to an Asian fund.

The pension fund has approved a commitment of up to $100m ($70.2m euros) into the.

Dean Kenderdine, executive director of the pension fund, has tapped Macquarie Global Property Advisors to invest in the $4bn MGP Asia III fund, now it is able to invest up to 25% in an international or opportunistic strategy.

"The main driving force behind this strategy is that it gives more diversification within our real estate portfolio and our total portfolio," said Kenderdine.

Investors in the commingled fund are projected to achieve IRRs of 17- 20%, after base fees, general partner performance participation and other partnership-level expenses.

State of Maryland, which had total assets of $40.1bn to the end of September, established this as part of its real estate plan in March, with the assistance of real estate consultancy PCA Real Estate Advisors, as it has a targeted real estate allocation of 5%.

That said, it is not the only pension fund to take this route as Pennsylvania Public School Employees Retirement System has agreed to commit an amount equal to 25% of the committed capital to the fund, not exceeding $200m.

Asia Fund III is an opportunity fund targeting development, redevelopment, portfolios, real estate companies, land, mortgage loans and mezzanine debt, and the net of potential location is wide as countries considered for investment will include Japan, South Korea, China, Hong Kong, Vietnam and Indonesia.

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