The South Carolina Retirement System is investing $775m (€714.5m) in three real estate strategies.
The US pension fund is investing $400m in Morgan Stanley’s Prime Property Fund, $300m in Blackstone Property Partners and $75m in Brookfield’s Strategic Real Estate Partners II fund.
Not all of the capital will be invested immediately in the Prime Property Fund.
The pension fund, in a board meeting document, said $100m-200m would be invested over the next two years, with the remainder used as opportunities and pacing allows.
The current entry queue for the Prime Property Fund is more than $700m.
The core, open-ended fund buys mostly US office, industrial, retail and apartments.
Eric Rovelli, senior real estate investment officer for the South Carolina System Investment Commission, said Blackstone and Brookfield both had a “very strong investment history”.
The pension fund set up its commitment to Blackstone Property Partners so that not all capital would be called immediately.
Between $100m and $150m will be taken by the manager, with $150m-200m used in the future.
Blackstone has acquired its first asset for Property Partners, paying $310.5m for a mid-town Manhattan office building, according to a South Carolina board meeting document.
This core-plus office property, which has leases below market level, is 99% let, according to a pension fund document.
Brookfield, seeking a $7bn capital raise for Real Estate Partners II, will cover 28.6% of the total raise by making a $2bn co-investment in the fund.
The opportunity fund is targeting a 16% net IRR and a 1.8x net investment multiple.
Half of the capital will be invested in the US and the balance in Europe, Brazil and Australia.
Deals will include restructuring distressed investments, recapitalising companies and investing in broken capital structures.
South Carolina’s real estate pacing plan calls for it to invest $490m this year and $410m in 2016.