The Texas Permanent School Fund has approved $100m (€89m) in new commitments to real estate, according to documents received from the pension fund.
One of the commitments is a $50m allocation to the GreenOak Asia II commingled fund.
The total capital raise for Asia II is $500m, to be invested in several sections of the real estate markets in Tokyo.
Approximately 70% of the fund will be invested in Class B office assets, with the remainder invested in a combination of hotels, retail and residential properties.
The investment strategy for the fund will be to buy properties in need of minor improvements.
In a board meeting, Texas Permanent said the fund would spend an additional 5-7% of the property’s value to improve the asset.
The investor considers this ratio to be very low versus the improvement capital spent on assets in the US.
The investment period is 2.5 years, while the holding period for any assets in the fund is five years or less.
Texas Permanent also agreed to a $50m co-investment with an unnamed real estate manager, with which the pension fund has a current relationship.
This investment will take the place of a current limited partnership position.
Texas Permanent said the fund had a strong current investment portfolio in the US, and that less than 5% of it was not yet committed.
