Teacher Retirement System of Texas has approved $400m (€319m) of new commitments to opportunistic real estate funds.
The pension fund told IP Real Estate it will invest $300m in the Starwood Opportunity Fund X Global and $100m in Iron Point Real Estate Partners III.
Starwood Capital Group is planning to invest 50% of the capital of its global fund in Europe and the rest in the US, according to sources close to the matter.
It will invest in distressed debt, hotel-related assets, corporate recapitalisations and land, targeting gross total returns of 18-20% and net total returns of 14-18%.
Starwood declined to comment.
Iron Point Partners will invest Partners III in a range of sectors in the US, including office, industrial, retail, apartments, hospitality, military and senior housing, affordable housing and data centres, according to a consultant familiar with the fund.
Iron Point Partners is seeking to raise up to $750m for the fund and will be making a co-investment of approximately $9m.
Partners III has a 10-year life with two one-year extension options.
The company was unable to respond when contacted by IP Real Estate.