Canada Pension Plan Investment Board (CPPIB) has approved a $500m (€474.4m) commitment into the Hines Rialto Credit Partners commingled fund, as reported by the pension fund.
This commitment is part of approximately $700m of capital that was raised by the fund at its first close recently, according to sources familiar with the fund. The targeted capital raise for the fund is $2.5bn.
The Credit Partners fund will only be investing in the US office sector.
Many industry observers see this commingled fund as a contrarian investment play, because most of the large public pension funds in the US have been lowering their exposure to office assets over the past few years and do not expert the sector to recover any time soon.
Hines did not respond to an email seeking comment for this story. The real estate manager will be responsible for the asset management of the properties in the fund, with Rialto working on the special servicing of the assets.
The capital for the commingled fund will focus on originating loans for good quality, well-leased office assets. In some cases, this may include recapitalisations.
CPPIB also added to its office portfolio with a $72m mezzanine loan that is secured by a Class A office building in the Mission Bay district in downtown San Francisco.
The pension fund increased its infrastructure exposure with a $300m investment in the first-lien loan issued by Salamanca Infrastructure LLC. This entity owns in-construction midstream energy assets in the United States.
CPPIB declined to comment beyond what it publicly reported in its quarterly statement when contacted for this story.
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