REAL ESTATE - The California Public Employees' Retirement System (CalPERS) is to invest in Mediterranean holiday homes via a €231m fund set up with private US developer Hines.

HCS Interests will exploit opportunities in the Spanish, primarily coastal, second- and holiday-home market.

Hines said in a statement that Spain’s positive climatic, cultural and economic conditions – as well as sophisticated infrastructure development – underpinned its investment potential.

Fund manager Carlo Matta said the move reflected CalPERS’ confidence both in Hines and in the potential of the Spanish market.

HCS will be the fourth fund set up by the partners. Of the three existing joint funds, National Office Partners invests in the US, HCB Holdings invests in Brazil and HCM Holdings invests in Mexico.

The partners have set a target of three years for initial investment. The new fund will have a 10-year life.