H/2 Capital Partners hopes to raise $2bn (€1.84bn) next month for its latest real estate debt fund, according to one of its investors.
The investment manager is aiming to conclude fundraising for H/2 Special Opportunities Fund IV in June, according to board meeting document of Connecticut Retirement Plans and Trust Funds (CRPTF).
The pension fund is considering a $75m commitment to the fund.
Other investors in the fund include Arizona State Retirement System, which committed $150m.
The CRPTF board meeting document shows that H/2 Capital Partners is seeking a net internal rate of return of between 14% and 15%.
It will look to capitalise on what it perceives as an imbalance in the US real estate debt markets – between upcoming loan maturities and the current supply of debt capital.
Investments could include recapitalisations and refinancings.
The $75m will help CRPTF increase the size of value-added real estate portfolio. It has allocated 25% of real estate exposure to such strategies.
At the end of September of last year, it had $368m in value-add investments, representing 17.8% of its real estate portfolio.
The pension fund has also approved a $50m commitment to Blackstone Real Estate Partners Europe V.
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