GLOBAL - The Ohio Police & Fire Pension Fund has approved a $30m (€23.1m) commitment into the Savanna Real Estate Fund II.
Pension fund officials cited the management team at Savanna and the company's investment strategy of buying office buildings in the New York and Tri-State markets along the US East Coast.
The pension fund is expecting to achieve a 13% unleveraged gross internal rate of return (IRR) and a 15.5% leveraged IRR for its investment in the commingled fund.
Savanna Investment Management is the real estate manager of Real Estate Fund II and is seeking a $500m equity raise for the fund.
Ohio Police & Fire can make commitments into commingled funds of $50m or larger in some cases. Officials said the scheme made smaller commitments in funds that had a highly focused investment strategy, both by property type and location.
The pension fund has plenty of room in its real estate portfolio for further investment. Through the end of October, it had a real estate portfolio valued at $707m, or 6.25% of its $11.3bn of total plan assets.
The targeted allocation for real estate is 12%.
The pension fund is set to discuss its 2011 strategic real estate plan at its 22 December board meeting.