Tennessee Consolidated Retirement System (TCRS) has approved a $50m (€43.1m) commitment to a US medical offices real estate co-investment and a joint venture with AEW and Montecito Medical.

The pension fund told IPE Real Assets that part of its capital will be placed into a $245m joint venture to acquire a national portfolio of medical office buildings assets.

“The initial portfolio is well-diversified, well leased and has significant remaining lease term. Montecito is a “best-in-class” medical office building specialist,” TCRS said. The venture’s initial portfolio comprises 31 properties.

TCRS said part of its capital will go towards a joint venture established by the AEW Partners IX fund and Montecito Medical.

Michael Byrne, CIO and head of private equity and debt for AEW, said the programmatic joint venture with Montecito represents part of AEW’s overall strategy to “aggregate defensive healthcare-related assets, such as medical office, senior housing, ambulatory surgical centres, independent rehabilitation facilities and other assets that are critical for our ageing demographic”.

TCRS has also approved a $100m commitment to the Asana Partners Fund III, US retail real estate fund. The pension fund issued commitments of $40m to Fund I in 2016 and $70m to Fund II in 2018.

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