The Pennsylvania Public School Employees’ Retirement System is considering a $75m (€68.4m) commitment to a US multi-family strategy.
The pension fund will this week decide on the commitment to LEM Capital’s Multifamily Senior Equity Fund IV vehicle.
The fund, which will invest in Class B apartments in primary and secondary US markets, is targeting a net 12-15% IRR.
Increased demand from 20-34 year olds for prime rental properties is behind the move, along with the lack of new Class B products and occupancy levels at more than 95%.
LEM is targeting a $330m capital raise for the fund, with a hard cap of $400m and some leverage.
Pennsylvania Public School is considering its commitment as part of its value-add strategy.
Separately, the pension fund is weighing up a co-investment with Stockbridge Capital Group and has $150.3m left of co-investment capital for Stockbridge’s Real Estate Fund III.
It is also looking to make capital available to Stockbridge’s Real Estate Funds I and II.
According to a pension fund document, several investments in the three funds are in land redevelopment projects in the US.