Oklahoma Teachers’ Retirement System (TRS) has approved $200m (€185m) worth of new commitments into non-core real estate funds managed by Starwood Capital and KKR.

The pension fund said it has backed the Starwood Distressed Opportunity Fund XIII and the KKR Real Estate Partners Americas IV funds with $100m each.

Starwood Capital will co-invest in Fund XIII, up to a maximum of $100m or 2% of the fund’s total commitments.

The Townsend Group disclosed in a board meeting document for Oklahoma TRS that Starwood Capital is seeking to raise $10bn for Fund XIII, a global distressed real estate fund expected to have a first close next month.

Fund XIII is expected to generate an internal rate of return of 14% to 16% net and 18% to 20% gross using 60% leverage over a 10-year fund term.

The KKR fund, which targets industrial, multifamily, single-family rental, student housing and self-storage assets, is expected to acquire cash-flowing transitional assets in primary growth markets in the US.

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