Indiana Public Retirement System (INPRS) is to invest in Chinese car parks through a specialist fund managed by LimeTree Capital.

The US pension fund has made a $50m (€40.6m) commitment to China Car Parks Invest Fund II, according to a board meeting report.

It will invest in parking garages in tier-one cities in mainland China, including acquisitions and development projects. LimeTree is anticipating a rise in parking rates in China in the coming years.

INPRS told IPE Real Assets: “This is not a cyclical strategy, but instead a structural play on both the emerging consumer and the creation of institutional-quality parking investments in mainland China.”

LimeTree did not respond to a request for comment, but according to sources that track real estate fundraising the company is planning to raise between $500m and $600m for its second fund.

The fund had a first close in June 2017, securing commitments of $105m. LimeTree’s first fund, China Car Parks Invest Fund I, raised $334m in 2013.

According to INPRS, the eight-year fund is targeting a net internal rate of return of 15-16%, while using up to 50% debt financing.

The commitment will be included in its opportunistic real estate allocation which now stands at $286m. Its total real estate portfolio is worth $1.7bn.

It is the first time that INPRS has invested with LimeTree.