The State of Michigan Retirement System has invested $87.5m (€78m) in two US real estate assets.
Both investments were completed through separate account relationships.
The largest of the two investments was a $67m deal in Austin, Texas, with KBS Advisors as the manager.
Michigan also invested $20.5m an office asset in Washington DC, sourced through Domain Advisors.
The property acquired has a value-add component.
Michigan is also considering the development of urban apartments and warehouses and investing in various levels of the capital stack through credit strategies.
The pension fund has also added exposure in Europe where value-add opportunities are sourced through managers that have an established history and presence in the market.
It wrote in a board-meeting document that it was working with advisers to dispose of non-strategic properties in secondary markets at attractive values, returning more than $2bn in gross distributions.
Michigan said its portfolio produced a total one-year return of 11.1%, outperforming its benchmark, the NCREIF NPI, by 190 basis points.
The pension fund cited the increased rental income in for-rental housing, the lease-up of apartment developments and the growth of its RevPAR for its hotel assets.