Private equity firm Kohlberg Kravis Roberts & Co. is creating a private real estate investment trust, which will chiefly invest in mortgage-backed securities, bonds issued by other REITs and residential mortgages.

The firm has hired Friedman, Billings, Ramsey & Co. to market the private REIT, which will aim to raise $600 million from institutional investors. KKR declined to comment on the REIT offering.

Like publicly traded REITs, private REITs pay no income taxes on their earnings, distributing 90% of their income to investors in the form of dividends.