Virginia Retirement System has hired AgIS Capital to manage a $150m (€127m) farmland separate account.

It is the first time US pension fund has awarded a separate account for the asset class, although in February it announced it was investing $125m in International Farming Corporation’s US Farming Realty Trust III.

The new account — which gives the manager full discretion within certain investment guidelines — will be the first step in a relationship between Virginia and AgIS Capital, the pension fund said.

All capital will be invested in US farmland assets and it will form part of its real asset portfolio, which also includes real estate, timber and infrastructure.

The pension fund has no set allocation for these sectors, but commits capital when it finds compelling investment opportunities.

The fund had invested $9.4bn – or 12.6% of its $74.4bn in total assets – in real assets by the middle of the year.