UNITED STATES - Pennsylvania State Employees Retirement System has already approved a $25m (€16.2m) commitment to Senior Housing Partners IV commingled fund.

Pramerica could have anticipated the investment as the Pennsylvania pension fund invested in all three of the firm's previous senior housing partners series.

Rob Kochis, a principal at The Townsend Group, real estate adviser to the pension fund, said while Pennsylvania State was the first to move, some of its other clients are likely to follow suit.

"We are still a believer in the senior housing story. The demand for this niche property is still there in a big way as the senior population continues to grow. There will be good investment opportunities as the senior housing industry is fragmented from an ownership standpoint. We would expect that Pennsylvania State would not be the only client of ours that would commit capital to the fund," said Kochis.

Pramerica Real Estate Investors is looking to raise $400m of equity for the fund and then place up to 65% leverage on the assets so the fund is achieve leveraged IRRs in the range of 11-15%.

All of the fund's assets will be located in the United States and will include a mixture of assisted living and independent living forms of senior housing. But it is expected the investment strategy is more towards new acquisitions than to investing in new development projects.

Pennsylvania State currently has total plan assets of $34bn.

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