The Ohio Police & Fire Pension Fund has made its first real estate commitment for 2016.

The fund made a $50m (€44.1m) allocation to the Greystar Equity Partners IX fund, a US apartment-only value-add fund.

The pension fund’s real estate consultant, The Townsend Group, believes there is strong rental demand from Millennials.

Another factor for the pension fund was that it was under-allocated to apartments prior to making a commitment, having invested 21.4% of its total real estate portfolio in the property type.

Greystar is seeking a total capital raise of $1bn for its fund, with a $1.25bn hard cap.

The fund could be buying existing assets or making equity investments in new projects.

The fund has a targeted net IRR of 12%.

Ohio Police & Fire invested $35m in Greystar VII in 2011 and $50m in Greystar VIII in 2014. 

It is looking to invest up to $170m in real estate during the calendar year, entirely through funds.

Commitments will be between $40m and $70m.

The pension fund’s interest in non-core or tactical real estate is part of a drive to balance its portfolio between core and non-core.

Ohio Police & Fire still has room in its portfolio for additional real estate investments.

As of last month, this portfolio was valued at $1.51bn, or 11% of total plan assets.

The targeted allocation for the asset class is 12%.