Illinois State Universities Retirement System (SURS) has approved a $50m (€49.6m) commitment to a new US-focused real estate debt fund managed by Torchlight Investors.

The pension fund disclosed in a meeting document that it is placing the capital into the Torchlight Debt Fund VIII fund, subject to an agreement being finalised.

The fundraising target for the fund is currently unknown. Torchlight raised $2.04bn in October last year for Fund VII, the previous fund in the series.

With a leverage component of around 30%, the new fund will consider a mixture of debt structures. These include mezzanine, senior debt, preferred equity and subordinated commercial mortgage-backed securities.

The targeted returns for Fund VIII will be a net internal rate of return in the range of 10% to 12%.

Torchlight typically issues a co-investment into its funds. The fund manager invested $10m in Fund VII.

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