Property specialist FKP Funds Management's unlisted Core Plus Fund has raised $136 million from 17 institutional investors.

The fund, which initially aimed to raise $100 million, received applications for $160 million but was forced to scale back the offering.

The unlisted closed end fund has a portfolio of seven properties across the industrial and office markets and is targeting a 14 per cent return over six to eight years.

It has a 50 per cent allocation to existing real estate assets that require intensive management and a 50 per cent allocation to property development through joint ventures with FKP.

FKP Funds Management executive general manager Adam Learmonth said the fund attracted broad interest from across the market, including industry and corporate superannuation funds, property securities funds and fund-of-fund investors.

"The number of traditional institutional fund managers looking to acquire passive assets is at record levels," Learmonth said.

"This has driven down yields and total returns in the sector and opened up opportunities for managers such as FKP to produce uniquely-structured vehicles with an alternative investment strategy."

Statewide Superannuation Trust was one of the fund's largest investors.

"We were attracted to the unique real estate allocation the fund provided and the strong alignment of interests between management and investors," Statewide chief executive Frances Magill said.

The fund is 50 per cent geared with a total asset size target of $272 million. Learmonth said the seven existing investments equated to 50 per cent of the fund's available capital, with FKP Funds Management able to call equity from investors for the next two years.

FKP Funds Management is a wholly-owned subsidiary of FKP Property Group.