State of Michigan Retirement Systems (SMRS) is invsting $130m (€109m) in new real estate and infrastructure strategies.
The US pension fund is committing $50m to Rialto Real Estate Fund III, $50m to Avanath Affordable Housing III and $30m to ASF VII Infrastructure Fund B, it has revealed in a board meeting document.
Rialto Capital Management invests in distressed real estate in the US and commercial mortgage-backed securities (CMBS).
Avanath Capital Management, which manages Affordable Housing III, invests mostly on the East and West Coasts of the US.
ASF VII Infrastructure Fund B is related to Ardian Secondary Fund VII, a private equity fund of funds that focuses on secondary trading opportunities.
Ardian, which manages the vehicles, declined to comment, but SMRS said is will target a variety of sectors including transportation, healthcare/life sciences, energy, utilities and telecommunications.
SMRS has had a strong year in terms of its real estate and infrastructure investment performance. Its $6.5bn real assets portfolio produced a 12-month return of 8.7%, beating its benchmark — the NCREIF NPI — by 310bps.
This outperformance is greater than the 300bps lead reported on in June.
SMRS cited several factors behind the positive performance including an underweight to retail and office, and overweight to apartments and hotels.
Other factors were appreciation in medical office and industrial, realised gains from disposals during the period, and above-average returns from North American infrastructure.