Illinois Municipal invests in three European core property funds

The Illinois Municipal Retirement Fund (IMRF) is placing €125m in core European real estate funds.

The pension fund confirmed to IPE Real Estate that it is investing in open-ended funds managed by CBRE Global Investors, Invesco Real Estate and Cornerstone Real Estate Advisers.

The move will make IMRF one of the first US pension funds to put a significant amount of capital into core real estate funds in Europe.

Earlier this month, IPE Real Estate reported on how US pension funds could move away from the tradition of targeting higher-return strategies when investing outside their domestic property market.

Significant allocations from US pension funds to core European real estate could help develop the region’s open-ended property fund industry.

In May, IPE Real Estate reported that IMRF was searching for a manager of European core fund and that it was considering investing in Cornerstone’s fund.

IMRF has since decided to commit €50m to the CBRE Global Investors Pan European Core Fund, €50m to Invesco European Core Fund and €25m into the Cornerstone European Core Fund.

The pension fund has existing relationships with all three managers.

Cornerstone, owned by MassMutual insurance company in the US, has been seeking to raise $500m (€447m) for its open-ended fund with a long-term goal of building the size of the vehicle up to $1bn.

The company plans to invest in existing office, industrial, retail and residential assets in London and Paris, and major markets in Germany, the Netherlands and Spain.

The properties will be acquired with debt financing of up to 40%.

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