Waterton is planning to raise $1.25bn (€1.1bn) for its latest US apartment fund, according to an investor.

Orange County Employees’ Retirement System (OCERS) said it has approved a $75m commitment to the Waterton Residential Property Venture XIV fund.

The predecessor fund raised $920m in April 2018. Waterton declined a request for comment.

OCERS said in spite of real estate sectors experiencing some dislocation in fundamentals due to the COVID-19 pandemic, Waterton is positioned to “take advantage of distressed acquisition opportunities as motivated sellers could be forced to dispose of assets in an effort to create immediate liquidity”.

According to the pension fund’s real estate consultant The Townsend Group, the commitment to the Waterton fund will be necessary for OCERS to remain over-allocated to apartments in its real estate portfolio.

OCERS had 26.5% of its real estate portfolio invested in apartments through the end of 2019 compared with s 25.7% for the NFI-ODCE Index. However, the pension fund expects to sell a number of its non-core multifamily assets in the coming years, which would create an underweight to the property type, hence the commitment to the Waterton fund.

As previously reported, OCERS is planning to reduce its real estate allocation from 9% to 7% as it overhauls its asset allocation to take advantage of dislocation in financial markets.