Pennsylvania Public School Employees’ Retirement System is investing up to $150m (€128m) in Almanac Realty Investors’ eighth fund.

In its board meeting report, the pension fund said it will put the money in Almanac Realty Securities VIII (ARS VIII) to help meet its value-add real estate allocation.

Almanac Realty Investors declined to comment.

IPE Real Assets reported in October that ARS VIII is projected to at least match the $1.26bn raised for the previous fund, ARS VII, in May 2015.

The commitment from Pennsylvania PSERS will be one of the first large commitments into the fund.

Supporting its decision, the pension fund said that, even as property and capital market conditions have improved in recent years, there remains a number of owners lacking the time horizon, capital requirements or operating expertise to effectively own, manage and improve assets across multiple property sectors and markets.

Almanac will be providing growth capital for private and public real estate companies, mostly in the US, for ARS VIII.

Companies targeted will focus on generating recurring cash flows and demonstrate competitive advantages.

The target net returns for the fund are 12% to 14%. There will be no leverage placed on the fund.

In March, Pennsylvania PSERS had 36.6% of its real estate portfolio in value-add investments. Its investment policy calls for a long-term target of 50%.

The pension fund has previously made commitments to three funds managed by Almanac and several co-investments amounting to $343m.

The investments have generated a net internal rate of return of 12.7%, Pennsylvania PSERS said.