Massachusetts Pension Reserves Investment Management Board (Mass PRIM) could triple the size of its internally-managed direct property portfolio to $1bn (€887m) this year.
The public pension fund is one of the few in the US to have developed a direct real estate investment programme that does not rely on entirely on external investment managers.
It made its first in-house direct deal in December 2016 and today owns three assets valued at $304.9m.
The $71.7bn pension fund reiterated in a board meeting document that the in-house management would give it greater control and save on fees. The investment planned for 2019 could save the pension fund $4m per year, it said.
Mass PRIM said it will be seeking returns of 250bps above 10-year Treasuries or an unlevereged internal rate of return of between 5% and 6%.
The pension fund plans to target US industrial, multifamily, ground leases and triple-net properties in 2019.
Last month, Los Angeles Fire & Police Pensions revealed that it was considering setting up a direct real estate investment strategy that would be managed in-house.
The State Teachers Retirement System of Ohio is another US pension fund that manages direct real estate investments internally.