Pennsylvania Public School Employees’ Retirement System (PSERS) has approved a $200m (€186m) commitment to the PIMCO Commercial Real Estate Debt Fund II, according to a board meeting document.
The fund, which will target institutional-quality borrowers of US real estate, has so far raised $2.8bn, according to a report by Aksia, the investment consultant for Pennsylvania PSERS.
PIMCO, which is targeting total commitments of between $2bn and $3bn, expects to finalise capital raising in the next few months.
Pennsylvania PSERS is looking to invest in real estate debt due to an anticipated limited supply of financing for existing assets in the US.
The fund will target multifamily, industrial, life-science, hotel and office assets in central business districts, in or near dense population clusters or growth areas.
Loans are anticipated to feature floating-rate coupons with loan-to-value ratios of 60% to 75%, typically with terms lasting two to five years and 12 to 24 months of call protection.
The target internal rate of return is 8% to 10%.
Pennsylvania PSERS also approved a $200m commitment to the LS Power Equity Partners V.
The core-plus infrastructure fund will invest in US power-generation assets, including natural-gas fueled power plants, renewable generation and renewable fuels.