Oaktree Capital Management is planning a $3.5bn (€3.24bn) capital raise for its latest global opportunistic real estate fund, according to sources.

The amount expected to be raised by the Oaktree Real Estate Opportunities Fund VIII fund will exceed the $2.92bn total committed capital of the predecessor fund which targets debt and distressed opportunities.

The Minnesota State Board of Investment (SBI) said it has approved a $100m commitment each to Fund VIII and the manager’s Oaktree Real Estate Debt Fund III fund.

Fund VIII, which targets a 14% to 16% net internal rate of returns, will invest in a mixture of commercial, office and residential assets mainly in the US.

Minnesota SBI has classed its investment in Debt Fund III as private credit investment.

The fundraising target for Debt Fund III is currently unknown, but the manager raised $2.1bn in 2018 for Debt Fund II.

Oaktree’s debt funds are known to target assets in the US, Germany and the UK via mezzanine loans, commercial mortgage-backed securities, commercial/residential first mortgages and subordinated secured debt deals.

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