GLOBAL - The Nebraska Investment Council (NIC) has approved $63m (€49.6m) worth of real estate commitments into core open-ended commingled funds. 

The largest of the investments is a $50m allocation made to the Cornerstone Patriot fund through an NIC defined benefit scheme.

Jeff States, state investment officer at the NIC, said the main attraction was that at least 50% of its commitment would go into the commingled fund right away.

"The other half of the commitment might be called down by the manager at the end of 2010 when some acquisitions are completed," he added.

He pointed out that, for many other core open-ended funds, a commitment made today was unlikely to be called down until the first quarter of next year.

The NIC has estimated its investment into the Patriot fund will produce a net internal rate of return in the range of 8-9%. 

States said: "It's our assumption 70% of this return will be based on income and 30% on appreciation."

The NIC manages an account that has 8-10 school endowments located in the state of Nebraska, one of which is for the Nebraska Permanent School Fund.

For these endowments, the NIC has made two new investments in real estate - a $6.5m allocation to the Patriot fund and a $6.5m commitment to the USB Trumbull Property fund.

The Patriot fund is managed by Cornerstone Real Estate Advisers, while the Trumbull Property fund is run by UBS Realty Investors. 

Both funds aim to buy core assets - a mixture of office, industrial, retail and apartments - in the US.
 

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