Divco West Real Estate Services has raised $1.59bn (€1.32bn) for its largest real estate fund to date.

DivcoWest Fund V beat its $1.5bn target in its final close.

More than 40 investors, including domestic and foreign pension funds, finanicial institutions, endowments and high-net-worth individuals, placed capital into the fund. Around 80% of the capital came from existing investors.

Some of the larger commitments were from the Oregon Public Employees Retirement Fund ($250m), California State Teachers’ Retirement System ($200m), Teacher Retirement System of Texas ($200m), and the Texas Municipal Retirement System ($75m).

Stuart Shiff, founder and chief executive, said one quarter of the fund’s capital had already designated for investments.

It has already acquired office buildings in Boston and San Mateo, California for $66m and $73m, respectively.

The fund is targeting net returns of 10% to 13%, using approximately 65% leverage, by buying office buildings and R&D buildings that can be improved, respositioned or re-leased.

It is focusing on markets characterised by strong education and employment levels, amenities and transportation systems.