One of the largest opportunistic investors in real estate is raising capital for a new fund looking to profit from the upheaval in the market, Bisnow has learned. But the new fund appears to have no love for the distressed office sector.

Lone Star Funds has raised $2B for its seventh opportunistic real estate fund, according to a filing with the Securities and Exchange Commission.

Lone Star Real Estate Fund VII has an equity target of $6B, according to a filing from the Arkansas Teacher Retirement System last year. ATRS said it planned to invest $50M in the fund. With debt, that could give the fund more than $18B to invest.

Lone Star, a private equity firm founded and owned by billionaire John Grayken, has made its name buying during times of distress. In the last downturn, it bought distressed loan portfolios from banks in the UK, Ireland, Spain and Japan, as well as taking private the UK developer Quintain.

The plan is to do the same again, according to the ATRS filing.

“For this vintage, the Manager expects over-weights to more distressed property types, retail and hotels, and to operationally intensive sectors, hotels and senior housing, where the Manager sees long term structural demand interrupted by short term factors,” the filing says, leaving out the highest-profile distressed sector: offices.

Regional weights are preliminarily expected to be between 35% and 55% in major markets in the UK and Europe, 30% to 50% in North America, and 25% to 40% in Japan, according to the filing.

Loan Star said it expected to buy from banks, developers with troubled projects, funds coming to the end of their life and open-ended funds that need liquidity.

It is targeting net returns of 16% and transactions of $750M to $1B to reduce competition.

The filing says Grayken would invest $300M of his own money in the fund, Lone Star’s staff would be putting in $120M and the company would be putting in $60M from its balance sheet.