NEW YORK CITY—Fortress Investment Group said Thursday afternoon it had completed the capital raise for its latest opportunistic credit real estate fund. Capped at $1 billion, Fortress Real Estate Opportunities Fund II is about 63% larger than its predecessor, which closed at $625 million in September 2011.

The new fund has been on the market since 2014. It will target opportunistic investments in distressed and undervalued commercial real estate assets, primarily in the US and Europe.

Approximately 50% of FROF II's commitments come from public and corporate pensions, endowments and foundations. Pension & Investments reported that the San Francisco City & County Employees' Retirement System was among those investors, with a commitment of up to $75 million.

With the completion of this fundraise, the Fortress Credit Real Estate funds have accepted nearly $2 billion of new capital over the past 12 months, the New York City-based private equity firm said. About 20% of the fund's capital has already been committed or invested here and overseas. Separately, Fortress has also raised $800 million for opportunistic real estate investments in Japan.

To the casual observer, it may seem like a different investing world than the one in which FROF I was launched, yet the firm's real estate leaders would beg to differ. “Many think that because the US economy fundamentals are improving, which they are substantially, that the distressed debt opportunity in the US is disappearing,” Tom Pulley, co-CIO of Fortress' global real estate business, told PERE earlier this year. But we think that we are going to have this other wave as maturities come due over the next couple of years. It is our view that over 20% of those maturities coming due are going to have problems in refinancing and are going to need new capital in some form or fashion.”