UNITED STATES - Montana State Board of Investment has increased its exposure to international real estate with committing capital to two new commingled funds.

The pension fund has only been investing in international real estate for a short time, having committed $25m to the Morgan Stanley Real Estate Fund VI International in autumn 2006.

But it has now decided to invest $30m (€21.6m) in the Carlyle Europe Real Estate Partners III fund along with a $30m allocation to Macquarie Global Property Fund III.

Montana State does not believe it is large enough to create any kind of separate account program so, like most US pension funds, has instead turned to the indirect real estate market for pension diversification.

It will now continue to look at investing in international commingled funds, having also committed to US funds such as the DRA growth and income fund VI.

It latest investment with the Europe Real Estate Partners III value-added fund will see assets allocated to improve properties in Germany, France and UK while the Global Property Fund III looks more towards Asia like Japan, Hong Kong and South Korea where there are potential gains to be had from existing assets and through placing capital in public real estate companies.