Indiana Public Retirement System (INPRS) has made a $75m (€65.9m) commitment into a US mortgage debt strategy managed by Mack Real Estate Credit Strategies.

The $32bn US pension fund said in a board meeting document that it has approved the amount into Claros Mortgage Trust.

INPRS said real estate debt is likely to experience “lower volatility and better risk-adjusted returns than real estate equity, especially in market drawdowns”.

INPRS said it was expecting to return 9% to 12% from the investment and it would form part of its value-add real estate portfolio.

INPRS said Mack will target “transitional assets” – properties with a “temporary disruption in cash flow or generating income below market potential”.

Mack Real formed Claros Trust in 2015 when it received a $262.5m lead investment from Almanac Realty Securities VII, a fund managed by Almanac Realty Investors.

The real estate manager declined a request for comment.