Employees Retirement System of Texas is investing $100m (€94.4m) in funds focused on the US apartment sector.
The pension fund made two $50m commitments to Abacus Multi-Family Partners III and Waterton Associates’ Residential Property Venture XII fund.
Abacus is seeking a total equity raise of $300m-400m for Partners III, with targeted IRR returns in the mid-teens.
The fund will buy existing assets that are undervalued or distressed, looking to turn B to B+ quality into A quality assets over the next couple of years.
The fund will avoid the likes of San Francisco and New York, where prices have risen, making value-added returns harder to achieve.
Waterton is looking to raise $1bn-1.2bn for its Venture XII fund, which is due for a final close this summer.
Structured as a club fund with large investors, the vehicle has also been backed by Oregon Public Employees Retirement Fund ($100m) and California State Teachers Retirement System ($50m).
Waterton will also invest in underperforming properties in need of new investment, aggressive asset management and/or repositioning strategies.
In other news, Indiana Public Retirement System is investing $75m in Harrison Street Real Estate Capital’s Partners V fund.
The manager, which is making a $17m co-investment in the fund, is targeting a 16% net and 21% gross IRR.
The US-focused fund will buy assets in the student and senior housing, medical office buildings and self-storage sectors.
Existing properties and equity investments in new development projects will be sought by the manager.
