The State of Michigan Retirement System is investing $200m (€176m) in a debt joint venture with Rialto Capital Management.

All capital will be invested in the US, focusing on the office, industrial, retail and apartment sectors.

Loans will primarily be floating rate, with some fixed-rate deals, and most transactions will range between $10m and $20m.

The loans – either whole or mezzanine – will have a short duration, typically lasting 3-4 years.

Assets will be either core or of a transition/value-add nature.

The commitment is Michigan’s second with Rialto this year, having made a $50m investment in the Rialto Real Estate Debt Fund III.

The investment in the joint venture is part of $335m of new real estate commitments approved by the pension fund during the second quarter, according to its website.

Michigan is seeking opportunities that are shorter in duration, deliver more liquidity, produce consistent cashflows and provide a stable yield.

The pension fund made a $100m commitment to the Apollo Asia Real Estate Fund.

The investment will be split into two separate commitments, with $75m placed directly into the fund and another $25m reserved for co-investments.

Michigan has also made two co-investments on single-property assets, investing $20m with Transwestern Strategic Partners on a six-building office complex in San Jose, California, and $15m with Invesco into the Spiga retail property in Milan.

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