Tennessee Consolidated Retirement System (TCRS) has approved a $100m (€84.1m) commitment to a US data centre fund managed by Principal Real Estate Investors.

The pension fund told IPE Real Assets it is for the first time investing in data centre real estate via the commitment to Principal Digital Real Estate Fund, a fund seeking to raise $500m in total.

“The growing demand for streaming services, social media and other cloud-based technology, along with the increase in work from home idea, provides strong tailwinds to the sector,” TCRS said.

TCRS said the fund, which plans to buy or develop data centres, expects to generate internal rate of returns of 19% to 21%.

Principal Real Estate declined a request for comment.

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