Walton Street Capital has begun raising capital for its first open-ended core-plus US real estate fund, according to a founding investor.

Oregon Public Employees Retirement Fund (OPERF) said it has approved a $250m (€226.4m) commitment into the Walton Street Core-Plus Fund.

Speaking to IPE Real Assets, Tony Breault, senior real estate investment officer for the Oregon State Treasury, said: “We are a founding investor in the fund, and as a result of this are able to negotiate a fee that was half of the amount that a typical investor would get for being in the fund.

“This was an important feature for us, as we are trying to reduce the fees in our real estate commitments when we can.”

Walton Street is known for targeting value-add or opportunistic real estate assets.

“This fact was brought before our board and we said that Walton Street had stated that many times it had found attractive core plus deals, but had to pass them up because it didn’t have a product to fit those properties into,” said Breault.

The manager initially plans to raise about $500m and then grow the fund to over $1bn in the next few years.

The fund target gross returns of 8% to 10%, which would outperform the ODCE index by 100 to 150 basis points.

Walton Street declined a request for comment.