The School Employees Retirement System of Ohio has made its first real estate commitment this year, investing $75m (€66.4m) in a value-add strategy.

The US pension fund backed Lubert-Adler’s Real Estate Fund VII and could invest a further $100m in real estate this year.

Ohio School Employees said placing capital into a non-core fund at this point in the market cycle “made sense”, with income-producing strategies offering downside protection.

Lubert-Adlerm, which declined to comment, buys mid-sized real estate assets, repositioning apartments, retail and mixed-use assets in the US.

Ohio School Employees said targeted gross returns for the fund were 18-20%, with the total equity raise around $600m.

A strong current yield – and the fact the vehicle is not a blind pool but already seeded with assets – attracted the fund.

Ohio School Employees, which has a targeted allocation for real estate of 15%, has been an active investor in both core and non-core funds and REITs in the past year.

With a real estate portfolio valued at $1.35bn, the pension fund has room for more investing, with the sector accounting for 10.4% of its $13bn of total plan.