Nebraska Investment Council has approved a $50m (€43m) commitment to a US value-add real estate fund managed by Northwood Investors.
According to a pension fund board meeting document, the level of investment is conditional on Northwood raising a minimum amount for the Northwood US Real Estate Fund. If Northwood does not reach the threshold of $500m, the commitment will be reduced to ensure it does not exceed 10% of the total fund size.
Nebraska Investment Council said $45m was being committed by its defined benefit and cash balance benefit pension plans, while $5m was coming from the Omaha School Employees’ Retirement System.
According to information provided to Nebraska Investment Council, Northwood expects to hold the final close for the fund during the first quarter of next year.
The fund, which has already made four investments, is targeting a 16.8% net internal rate of return.
The strategy involves capitalising on distressed situations to secure or develop high-quality, core-like assets, focusing primarily on residential, mixed-use/retail, hotels and industrial properties.
Northwood did not respond to a request for comment.
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