State of Michigan Retirement System has revealed it was a net seller of real estate during its previous fiscal year, disposing of more than $1bn assets and funding less than $1bn of new investments.

According to its latest board meeting report, the $67.5bn pension fund is now looking to sell “properties in secondary markets where illiquidity occurs in periods of slower economic growth, and realising gains from the sale of assets at historically low capitalisation rates”.

During the 12 months leading up to the end of September 2017, the State of Michigan’s investment bureau had also built up $1.5bn of unfunded commitments.

Most recent commitments include $75m to Rialto Absolute Partnership I, a mezzanine loan secured against a 2.1m sqft portfolio of biomedical office and laboratory buildings.

It follows previous investments made with Rialto Capital Management. In April 2016, Michigan committed $50m to Rialto Capital Management’s Real Estate Fund III-Debt, followed in June by a $200m debt joint venture. In September last year, the pension fund committed $50m to Rialto Real Estate Fund III.

The State of Michigan’s investment bureau also invested with Transwestern Strategic Partners, committing $50m to its TSP Fund II and co-investing $20m in an industrial porfolio.

The pension fund said TSP Fund II will invest in office, industrial, retail, multifamily and medical office properties in the US.

Its investment in TSP Spartan C-II, a co-investment vehicle, will provide the pension fund with the partial ownership of a 2.5m sqft industrial portfolio of nine class-A assets.

The State of Michigan, which has $6.55bn in real estate and infrastructure holdings, has made previous invesmtents with Transwestern in April and June 2016.