Benson Elliot Capital Management, the European private equity firm, has raised €500m (£448m) to target distressed property assets.

It has closed the pan-European fund, Benson Elliot Real Estate Partners III, with subscribed capital of €510m (£457.2m), against a target of €500m (£448m).

Benson Elliot launched the fundraising for the fund in the third quarter of 2008, closing on almost 90% of its target capital in just ten weeks.

The fund is Benson Elliot's second fund and will invest in a broad range of ‘performing and non-performing’ real estate assets across Europe.

The fund is 50% larger than its previous fund and Benson Elliot has an enlarged professional team to manage the fund.

All but one of Benson Elliot’s BEREP II investors have subscribed to BEREP III.

Investors in BEREP III include Makena Capital Management, The State Teachers Retirement System of Ohio and UTIMCO.

Marc Mogull, managing partner at Benson Elliot, said: ‘This tough fundraising environment favours firms like Benson Elliot, which have the capability and experience to take advantage of market upheaval. During the second half of 2008 virtually no private equity real estate funds were launched, due to the paralysis in the real estate sector and wider financial markets.’

Probitas Partners, a global alternative investment services and fund placement firm, is Benson Elliot’s global placement agent.