Two US pension funds have chosen to invest in the JP Morgan Strategic Property Fund despite facing a wait of more than a year before their capital is called.

San Diego City Employees’ Retirement System and Kansas Public Employees Retirement System could wait between four and five quarters before their equity is deployed by the open-ended fund. It highlights the demand for core real estate exposure among institutional investors in the US.

The $23.7bn Morgan Stanley fund has been one of the best performing US core open-ended funds over the medium and long term, according to San Diego City’s investment consultant Aon Hewitt. It also has one of the biggest entry queues, with $1.7bn in capital waiting to be called last September.

Board meeting documents prepared by Aon Hewitt show that annualised returns for the past five and 10 years were in the top quartile among its peers in the NFI-ODCE Index.

The consultancy also told San Diego City that the large size of the fund enabled it offer exposure to multiple trophy office assets and large regional shopping malls in top US markets.

Both pension funds are already invested in the fund: San Diego City has $60m invested and Kansas PERS approved a $125m commitment in July 2013. The pension funds are now each committing $30m in fresh equity.

San Diego City has also approved a $20m investment in the $500m Alcion Real Estate Partners Fund III.

The opportunity fund is targeting gross returns of 20% by investing in retail, residential, office and industrial assets in New York, San Francisco, Boston, Chicago, Toronto, Los Angeles and Washington DC.