The new Clydebuilt vehicle will invest in properties across the former Strathclyde area with the aim of generating returns for the pension fund and possible spin-off benefits including the regeneration of property in disadvantaged areas.
Convenor of Strathclyde Pension Fund and Glasgow City Treasurer, Councillor Paul Rooney said: "We always look to deliver for our members who are saving for their futures - but this fund can also provide a real boost for the local economy."
The pension fund has appointed Scotland's Ediston Real Estate to manage Clydebuilt.
Danny O'Neill, chief executive of Ediston Real Estate, said Clydebuilt will invest in property that is out-of-favour with large institutional investors and which the property specialist can improve.
He said Clydebuilt represented an innovative move by the 200,000 member Strathclyde Pension Fund that might be followed by other institutions.
The new fund will invest in properties costing less than £10m.
Administered by Glasgow City Council, Strathclyde Pension Fund has traditionally focused on investments of over £10 million across the whole of the UK.
Ediston will invest an undisclosed amount in Clydebuilt alongside the pension fund.
The £50m equity funding in Clydebuilt will be supplemented by £25m debt.