Arkansas Teacher Retirement System has approved a $100m (€85.2m) commitment to Realty Income’s open-ended US core-plus real estate fund.
The pension fund disclosed in a board meeting document that it has committed the capital to Realty Income US Core Plus Fund, a vehicle seeking to acquire and manage a portfolio of diversified net lease investments.
The fund currently holds 183 industrial and retail properties across 33 states, valued at approximately $1.4bn.
According to people familiar with the fund, Realty Income recently held an initial closing of $715m, securing capital from various sources, including pension funds, asset managers, investment advisors and sources managed by The Townsend Group.
Around half of the initial capital raised is expected to be used to buy into the seed portfolio, with the remaining capital funding future acquisitions.
The fund targets a net internal rate of return of 9% to 11%, utilising leverage of 35% to 50%, and Realty Income plans to issue a long-term $500m co-investment to the fund.
Realty Income did not respond to a request for comment.
Arkansas Teacher said it also approved a $50m commitment to the Raith Real Estate Fund IV, a value-add fund managed by Raith Capital Partners seeking to raise $900m.
Fund IV plans to acquire or develop a mixture of industrial, apartments, office, hotels and niche property types.
Arkansas Teacher also issued a $75m commitment to ISQ Global Infrastructure Fund IV.
As previously reported, I Squared Capital is seeking to raise $15bn for ISQ Global Infrastructure Fund IV to be used to build a diversified portfolio of 25 to 30 investments in middle-market and larger opportunistic assets.
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