The California State Teachers Retirement System (CalSTRS) is investing $300m (€284m) in Starwood Capital Group’s latest global opportunity fund.

The pension fund has approved the commitments, which include co-investment capital, to Starwood Global Opportunity Fund XI.

The fund could could also attract $100m from Connecticut Retirement Plans and Trust Funds (CRPTF), which is considering committing, according to a board meeting document.

The document shows that Starwood had raised around $3.2bn for the fund at the end of last year and hopes to reach its $4bn target this month.

Starwood did not comment.

Half of the capital raised is expected to be invested in Europe with a particular focus on Spain and Italy.

It will look to invest in distressed debt, value-added acquisitions and corporate transactions.

Starwood will be making a $50m co-investment in the fund and is targeting gross returns of between 17% and 20% (net 14% to 16%), with 7% to 10% to come from income.

CRPTF is currently below its 25% target allocation to opportunitistic strategies within its real estate portfolio.

An investment in the Starwood fund would help increase the opportunistic weighting from 19.1% to 22.8%.