The Orange County Employees’ Retirement System is seeking managers for a planned alternatives income strategy.

The US pension fund has issued a Request for Proposal, according to a pension fund document.

Two of the strategies being explored involve real estate debt and infrastructure.

It will most likely invest 1% of its $12bn (€10.7bn) in total plan assets, resulting in a potential allocation of as much as $125m.

A comprehensive asset allocation review will be undertaken by the fund, which is yet to establish a definitive allocation for alternative income strategies.

The pension fund is not looking to hire smaller managers.

It wrote in the RFP that managers with strategies presently or expected to close with less than $500m in total should not apply.

Investments should not exceed 20-25% of committed capital.

The potential commitment could be higher, subject to subsequent capital infusions from other investors that would satisfy its concentration limits.

Real estate debt and unlevered CBMS portfolios are a possibility, provided debt is not substantially or materially mezzanine or subordinated.

The pension fund prefers debt higher in the capital stack for real estate.

Core-plus infrastructure, including renewables infrastructure, are being considered.

First-stage venture, entrepreneurial, prospecting and construction risk are regarded as effectively eliminated or contractually mitigated.

All proposed strategies must produce net IRRs of more than 8% to be considered and should have moderate risk profiles.

Risk-adjusted returns will need to be higher than the average for the fund’s portfolio.

The deadline for the RFP is 27 June.