The Arkansas Teacher Retirement System is backing Harbert Management’s fourth European fund with a $25m (€22.1m) commitment.

The pension fund is investing the capital in the Alabama-based company’s value-add European Real Estate Fund IV.

Harbert is seeking a total equity raise of €600m, with leverage of up to 75% on a portfolio basis.

The manager is aiming to complete a final close this year.

Many investors’ view that real estate markets in Europe are years behind the US on a recovery basis is attracting capital.

Most of Arkansas Teachers’ capital will be invested in existing properties, with developments an option for the fund.

Harbert will invest in the UK, France and Spain, where it has regional offices.

The fund is focused on the office, industrial, retail and apartment sectors, with most deals in the €20m to €100m range.

Transactions will include the repositioning of existing assets or financially distressed property or real estate in out-of-favour sectors or markets.

Arkansas Teachers has placed the new commitment into its real assets portfolio, which made up 13% of its total plan at the end of September last year.

The fund recently committed $20m to the Metropolitan Real Estate Partners Secondary & Co-Investments Fund.