The Oregon Public Employees Retirement Fund (Oregon PERF) has taken the California State Teachers’ Retirement System’s (CalSTRS) stake in a US residential property fund.

The US pension fund paid $205m (€191m) for a 50% stake in the Waterton Residential Property Fund IX vehicle.

CalSTRS and Waterton have sold 41% and 9% stakes in the fund, respectively, having previously been 90/10 owners of the fund.

Anthony Breault, senior real estate investment officer at Oregon Investment Council, which oversees investments for the pension fund, said: “This was a way for us to invest in some core apartment assets – this is a property type we feel very good about on a long-term basis.

“There is a tremendous amount of demand for apartments, with many young people not having much interest in owning a home.”

The investment by Oregon PERF is a way for it to invest in core assets without entering a bidding process.

Breault expects leveraged returns of 8-10%.

“We think this is quite attractive,” said Breault, who declined to comment on how many properties were still in the venture, or where the apartments were located.

CalSTRS and Waterton first formed the fund in 2006, with $330m of equity in the venture.

The pension fund committed 90%, or $296m, of the equity, with the manager supplying the balance and taking 10% ownership.

Oregon PERF has invested with Waterton in the past, making a $100m commitment to its fund XII vehicle last year.