KKR is planning to raise up to $3.5bn (€2.9bn) for its latest opportunistic Americas real estate fund, according to San Diego City Employees’ Retirement System’s (SDCERS) meeting document.

KKR declined a request for comment.

SDCERS, which is planning to approve a $30m commitment to the KKR Real Estate Partners Americas (REPA) III fund, said in the meeting document that the fund’s opportunistic strategy makes it well-positioned for the current market environment.

The $3.5bn hard cap planned by KKR does not include the approximately $300m co-investment that the manager expects to issue into the fund.

The general partners’ commitment will include capital from the KKR balance sheet and employee commitments on side-by-side vehicles.

The fund plans to have up to 70% leverage and expects to secure assets that can produce net internal rate of returns in the range of 12% to 15%.

The predecessor REPA II fund, a $2bn fund dedicated to value-add and opportunistic real estate investments primarily in the US closed in January 2018.

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