The South Dakota Investment Council is backing opportunity funds managed by Blackstone and Lone Star.
The US pension fund has approved two $300m (€267m) commitments to the managers, according to a board meeting document.
Both investments – to Blackstone Real Estate Partners Europe V and Lone Star Real Estate Fund V – are follow-on commitments.
Matthew Clark, state investment officer at South Dakota, said: “We have invested with Blackstone in many of its investment funds in Europe and all of their funds in the US and have many previous commitments with Lone Star.
“We have been pleased with their previous performance.”
There is no guarantee the full $300m allocations will be placed into each fund.
South Dakota will announce the final amount at its June board meeting.
Blackstone is seeking a €7bn capital raise.
The manager is co-investing €100m in the vehicle, which will target Europe.
Around 60% of the capital is planned for investment in the UK, Germany and France.
Ireland, Spain and Italy are other potential markets.
Limited partners in the fund are projected to achieve a 15% net IRR with a 1.7x equity multiple.
Lone Star V will be investing mainly in the US and Europe, as well as Asia-Pacific, with a $5.5bn hard cap on the fund.
South Dakota makes investments in real estate though limited partnerships, without a set targeted allocation, investing when it finds an attractive investment opportunity.
The investor’s real estate portfolio now makes up 11% its $10.7bn in total plan assets.