Walton Street Capital has raised $654m (€583m) for its debut real estate debt fund.

Existing and new investors, including US and non-US government pension funds and insurance companies, backed the Walton Street Real Estate Debt (WSRED) vehicle, as well as asset managers, banks, family offices and high net worth investors.

The Chicago-based private equity firm said the fund exceeded an initial target of $500m.

Richard Ratke, senior principal leading investments, said: “We are excited about the lending opportunities for WSRED given the favourable dynamics of the credit markets for high-quality commercial real estate and the attractive risk-adjusted returns achievable in WSRED’s investment sector.”

The core-plus strategy focuses on the origination and structuring of floating-rate debt investments, with investments secured by income-generating assets in major US markets.

The fund has committed more than $220m to investments in office, retail and hotel assets in core markets, including Los Angeles/Orange County, Washington DC/Northern Virginia, Chicago, Dallas, Minneapolis and Hawaii.