UNITED STATES - Oregon Public Employees Retirement Fund has made its first move into an infrastructure commingled fund and approved a $200m (€140.3m) commitment into the Alinda Infrastructure Fund II.
The pension fund took this action at its board meeting on 24 September following a presentation from Alinda's managing partner Chris Beale and partner Phil Dyk.
"There is real need in the marketplace for capital to be invested in infrastructure in many communities given the financial situation we are now in," said John Hershey, alternatives investment officer for Oregon PERF.
"Historically, these kinds of assets have produced good risk adjusted returns. They are entities that are essential services for many regions."
Oregon is projected to achieve a gross IRR of 18-20% on its commitment for the commingled fund, assuming a five- to seven-year holding period.
Alinda is looking to raise more than $3bn in equity - the amount of capital attracted to its initial infrastructure fund - for Fund II.
Fund II has a global investment strategy which calls for 75% of the fund will be invested in North America and 25% in Europe, though there is a possibility up to 20% of the fund could be placed in international markets besides Europe.
Assets will be placed in a wide variety of investments such as toll roads, municipal power plants, transportation, energy systems and community facilities.
Oregon PERF placed its infrastructure commitment within the opportunity fund segment of its asset allocation first established in 2005.
That allocation is worth up to 3% of total plan assets but just 1.3% of its total plan assets of $57.39bn has been actually invested in this space.
There have been three real estate commitments made in the opportunity fund asset class: $200m in Blackstone Real Estate Fund VI, $150m in Rockpoint Real Estate Fund III and $100m in the Fidelity Real Estate Opportunity Income Fund.