New Jersey Division of Investment is investing in farmland for the first time, as it earmarks up to $300m (€262m) for real assets this year.

In a board meeting document, the $77.5bn pension fund said it is considering a $100m commitment to Homestead Capital USA Farmland Fund III.

Fund manager Homestead Capital is seeking to raise $600m for the fund, with a hard cap of $700m. As previously reported, Maine Public Employees Retirement System made a $50m commitment.

New Jersey Division of Investment said the investment would help diversify its real assets portfolio away investments exposed to energy commodity prices. It also said farmland investments have low correlations to fixed income and equities.

Homestead Capital will invest in value-add US farmlands, including both row and permanent croplands.

New Jersey said it plans to invest up to $300m in real assets in 2019 and will consider agriculture, infrastructure and timberland.