The Florida State Board of Administration has invested in a European opportunity fund as it looks to plough $600m (€432m) into non-core real estate on both sides of the Atlantic.

The US institution has committed $75m to the Tristan Capital Partners European Property Investors Special Opportunities Fund III, which has raised close to a €1bn from investors.

Florida could end up investing up to $600m in other high-return strategies in both Europe and the US by the end of the year.

Steve Spook, senior investment officer for real estate funds at Florida, told IP Real Estate that the proportion of the capital deployed in Europe would depend on opportunities arising.

He said it was a good time to invest in Europe with government austerity measures and deleveraging creating investment opportunities. Investors in Europe are extremely risk-averse, leading to a mispricing of risk, Spook added.

Florida is looking at all areas of Europe, including large, more liquid markets, such as the UK, Germany and France, which appear to be offering attractive risk-adjusted returns.

Investments will be made through commingled funds and joint ventures and through separate account managers.

Florida’s $600m in available capital comes from two sources: the need to re-invest existing non-core investments and from the pension fund’s decision in 2013 to increase its real estate allocation from 7% to 10%.

The allocation increase has freed up $4.1bn of new capital that can be invested in real estate.