Oregon Public Employees Retirement Fund is to invest $425m (€312m) in two real estate opportunity funds.

The pension fund approved a commitment of $300m to Lone Star’s Fund IX.

A $125m commitment to Och-Ziff Real Estate’s Fund III is pending. If approved, the investment would be Oregon’s first with Och-Ziff.

Lone Star is looking to raise $7bn for Fund IX. Limited partners in the fund are projected to achieve 25% gross and 20% net IRRs.

The fund will invest in the US, Asia and Europe, where around 50% of capital could be invested, with a focus on Spain, Italy and France. Around 40% of investment will be in the US, with the balance in Asia.

Lone Star has a distressed investment strategy for the fund, targeting single-family residential loans and securities, corporate and consumer debt products and asset-rich operating companies.

Och-Ziff meanwhile, is seeking to raise $1bn for Fund III, in which it will co-invest 7.5% of aggregate commitments up to $75m.

Individual real estate assets, loans, portfolio acquisitions and loan pools, as well as operating companies, structured debt products and public securities, will be targeted by the fund. With a focus on US assets, up to 20% of the capital could be invested abroad.