The New York State Common Retirement Fund has hired Brookfield Asset Management for the first time.
The US pension fund gave the manager $500m (€440m) to invest in real estate, placing $400m directly into Brookfield’s Strategic Real Estate Partners II fund.
Another $100m has been set aside for co-investment opportunities.
The pension fund cited Brookfield’s established operating platform, which it said provided access to resources and expertise beyond those typically available to a standalone fund of similar size.
Brookfield is looking to raise $7bn for the global opportunity fund, with no hard cap.
The fund manager and its affiliates will be making a $2bn co-investment.
Targeted returns are a 16% net and a 20% gross IRR for the fund, which will focus on North America, Europe, Brazil and Australia.
The expected equity commitment per transaction will be $50m-200m for direct acquisitions and at least $200m for large-scale/corporate transactions.
The main focus will be office, retail, apartments, industrial and hotels.
Transactions will include direct purchases and acquiring positions of control or influence in real estate companies, distressed loans and securities.
New York Common has also allocated $350m to the JP Morgan Strategic Property.
The open-ended fund will invest in a mixture of core US assets geared towards a mixture of office, retail, apartments and industrial assets, focusing on San Francisco and New York City.