Virginia Retirement System has approved a $150m (€134.2m) capital commitment into KKR’s latest real estate credit vehicle.

The $80.2bn pension fund said the amount being committed into the KKR Real Estate Credit Opportunity Partners (RECOP) II fund will be placed into Virginia Retirement’s credit strategies asset class.

SEC filing in March this year showed that KKR is raising an undisclosed sum for RECOP II. RECOP I raised $1.1bn raised in October 2017.

RECOP II will target either the junior bonds or B-piece securities segment of the commercial mortgage-backed securities (CMBS) business.

The capital will be invested in a variety of property properties that are secured by the debt.

According to industry sources, there is a high amount of annual conduit CMBS issuance and a limited source of investors who target the B-piece segment of the business.