Ohio Public Employees Retirement System (PERS) only managed to invest close to a quarter of the $500m (€424m) it planned to put into closed-end real estate funds last year.

The pension fund said in a board meeting document that it made a $123m commitment to the Lubert-Adler Real Estate Fund VII-B.

It was the only closed-ended fund investment made by Ohio PERS in 2017. IPE Real Assets reported earlier this year that the pension fund could become under-allocated to real estate as it acknowledged the difficulty of investing in the asset class today without taking undue levels of risk.

According to industry sources, the shortfall is reflective of pension funds being more cautious with their commitments as real estate markets look to be close to the end of the current market cycle.

Lubert-Adler Real Estate Fund VII B is a closed-end fund with a planned total capital raise of $250m. As previously reported, the vehicle was structured to allow for a second round of fundraising for Lubert-Adler’s seventh opportunity fund.

The new vehicle was first made available to existing investors in the fund. It has since been opened to other investors and has received $75m from Minnesota State Board of Investment.

The fund targets a gross internal rate of return of 18% to 20%. It will be looking to invest in medium-sized, value-add and opportunistic deals in US apartment, retail and mixed-use assets.