Virginia Retirement System has added to its real estate manager line-up by investing $125m (€112m) in The Carlyle Group’s latest US fund.

The pension fund confirmed to IPE Real Estate that the commitment to Carlyle Realty Partners VIII was the first time the pension fund has invested with Carlyle.

It said the “investment complements the existing aspects” of its real assets portfolio.

Unlike many US public pension funds, Virginia Retirement System does not have a specific target allocation to real estate but rather invests in the asset class when it finds a compelling opportunity.

As reported by IPE Real Estate earlier this year, Carlyle is seeking to raise up to $5bn for the fund.

The Carlyle fund will give the pension fund access to alternative property types, such senior living, active-adult living, self-storage, manufactured housing, student housing and for-sale residential.

Carlyle Realty Partners VIII is an opportunity fund, targeting gross returns of 16% to 20%, using up to 70% leverage on a loan-to-cost basis.

It will invest in existing assets that can be improved and fund development projects before selling to core buyers.

Target markets include New York City, Boston, Northern and Southern California and Washington, DC.