REAL ESTATE- The Oregon Public Employees Retirement Fund has allocated $225m to invest in two opportunity funds and will be pursuing a global REIT strategy later this year.

The fund has approved a $100m investment into the IL&FS India Realty Fund. This is a $300m commingled fund that is being raised by IL&FS Investment Managers LTD.

Spokesman Kevin Max said: “We think there are many interesting investment opportunities with this manager in India. The economy is growing in the country and is ready for the development of some new projects.”

Oregon has become one of the first major pension funds in the US to invest in India. Max said, “This should come as a great surprise to anyone who knows the history of Oregon PERF. We are a very progressive public pension fund as far as investment strategy. We were the first public pension fund to create a REIT investment mandate.”

Many of the top investment staff at Oregon recently went to India and toured the country to get a first hand look at how things are there. Those making the trip included Real Estate Investment Officer Brad Child and Director of Investments Ron Schmitz.

The investment strategy for the India Realty Fund is to place capital into new development projects in major markets throughout the country. This would include residential, office and industrial. The commingled fund shoots for deals that will produce gross IRRs of 25% and net IRRS of 20%.

Oregon made a $125m commitment into the Fortress Investment Fund IV. The fund is managed by New York-based Fortress Investment Group. The total equity raised for the fund is $3bn.

The commingled fund goes after distressed or undervalued real estate assets. These could be on individual properties or large portfolios. Oregon expects it will get an 8% preferred return on its investment.

Oregon is planning on being a player later in 2006 with a global REIT mandate. No amount of capital has been allocated for this strategy at this time. Max said, “This is a logical extension from our domestic REIT program and will achieve more diversification within the portfolio by investing in different economies and countries.”

Oregon has had an active domestic REIT program since the early 1980's. Its current value is $847mn.