San Diego City to invest $40m in Oaktree's US and European debt fund

San Diego City Employees’ Retirement System is planning to make a $40m (€36.7m) commitment to Oaktree’s Real Estate Debt Fund II.

The pension fund and its investment consultant Aon Hewitt believe real estate debt provides one of the more compelling strategies in the market today, according to a board meeting document from the pension fund.

Oaktree revealed last month, during a first-quarter-results announcement, that it had raised $800m for the fund.

In 2013, Oaktree raised $1.1bn for Real Estate Debt Fund I, and it is understood that the manager is looking to raise a similar amount for the new fund.

In December last year, IPE Real Estate reported that the Teachers’ Retirement System of the State of Illinois had committed $100m to Fund II.

The fund will invest mainly in the US, although it can allocate up to 30% of investments in other markets, including the UK, Germany, Japan and South Korea.

It will pursue six different types of investments: mezzanine loans, commerical mortgage-backed securities (CMBS), property-related corporate debt, commercial first mortgages, residential first mortgages and subordinated secured debt.

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