Pennsylvania Public School Employees’ Retirement System is to invest $300m (€281m) in non-core real estate through new funds launched by The Carlyle Group and Ares Management.

The pension fund is committing $200m to Carlyle Realty Partners VIII and $100m to Ares US Real Estate Fund IX.

According to a board meeting document, the Carlyle fund will focus on a wide range of real estate sectors, including senior living, self-storage, manufactured housing, life sciences, student housing, for-sale resisdential, office, industrial, retail and hotels.

The document, prepared by real estate consultant Courtland Partners, said Carlyle expects the two biggest areas of activity to be in the multifamily and ‘active-adult living’ sectors.

Carlyle Realty Partners VIII will target New York City, Washington DC, California, Atlanta, Boston, Chicago and Seattle.

It will invest in both debt and equity and focus on assets that can be turned into class-A properties through renovations or development – with a view to selling them on to core buyers.

The Ares fund will focus on office, industrial, retail and apartment assets that can be improved through renovations, repositioning and re-tenanting.

The deals for the fund will include a mixture of direct property acquisitions, joint ventures, preferred-equity investments and mezzanine loans.

The commitment to the Ares fund will increase the pension fund’s value-added section of its real estate portfolio.

At the end of September 2016, the investor had one-third of its portfolio in value-add. It has a long-term allocation of 50%.