The Teacher Retirement System of Texas plans to invest $200m (€180m) with real estate fund manager Lionstone, half of which will be take the form of co-investments.

The pension fund told IP Real Estate it had approved a $100m commitment to the Lionstone US Value-Add Four fund and will provide an additional $100m in co-investment capital.

It is the latest indication that Texas Teachers is increasing its co-investment activities. Last week, it revealed it would open in an office in London, in part to help with co-investment efforts in Europe.

Lionstone, which declined to comment, will be able buy and improve existing buildings and invest in development projects, according to industry sources.

The value-add real estate fund manager typically invests in a variety of US growth markets, such as San Francisco, Dallas, Houston, San Diego and Santa Monica.

Texas Teachers has been investing with Lionstone since 2010, when the pension fund committed $275m to Lionstone Cash Flow Partners Fund One.