Massachusetts Pension Reserves Investment Management Board is considering direct real estate joint ventures for the first time.

In a board meeting document, Mass PRIM said direct joint ventures are being considered as a future strategy. The pension plan would focus on unleveraged investments in the US with strong operating partners.

The strategy, it said, could lead to significant savings. A $100m (€72.6m) investment with a five-year hold could save $5.1m in fees. Mass PRIM would maintain approval or veto rights on major decisions.

Mass PRIM still has room to invest in real estate, with a 10% targeted allocation for the sector. Its real estate portfolio is valued at $5bn – or 8.7% of its overall investment portfolio valued at $58.2bn.

The pension fund has acquired three core properties this year for $188m through existing separate account mandates. LaSalle Investment Management bought two apartment schemes in Tennessee and New Jersey, while AEW Capital Management bought a shopping centre in the Dallas/Fort Worth region.

The three acquisitions mean Mass PRIM is more than halfway towards of its objective to invest $345m in core real estate in 2014. Invesco Real Estate, JP Morgan Asset Management and TA Realty also manage separate accounts on behalf of the pension fund.

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