The Employees Retirement System of Texas has approved a $65m (€53m) commitment to Waterton Residential Property Venture XIII, according to the pension fund’s board meeting report.

Late last year, IPE Real Assets reported that residential specialist Waterton was seeking to raise up to $1bn for its latest US apartment fund.

Orange County Employees Retirement System (OCERS), which made a $100m commitment to the fund, said in its board meeting report that the real estate manager aims to use 65% leverage to achieve a total capitalisation of $2.1bn.

Waterton, which declined to comment, is targeting a net internal rate of return of 13% for the fund.

It will mostly make traditional value-added acquisitions, but a quarter of its activity is expected to involve debt investments.

Waterton plans to buy subordinated tranches of debt from Freddie Mac securitsations of multifamily mortgage loan pools.