Kennedy Wilson has raised $775m (£600m) for a new fund focused on value-add real estate investments across the western states of America.
The Kennedy Wilson Real Estate Fund VI will have a purchasing power of £2bn and will be the largest private placement in the company’s 31-year history. It is some 55% larger than its predecessor fund, which closed in 2016.
The Kennedy Wilson team secured capital commitments from a diverse, global institutional investor base, including private wealth management offices, public and corporate pension funds, and family offices. Kennedy Wilson committed $82m to the fund.
“The close of our sixth value-add discretionary fund is a milestone moment for our investment management platform, and feeds into our focus on expanding our third-party capital raising,” said William McMorrow, chairman and chief executive of Kennedy Wilson.
“We are pleased to grow our relationship with those who have invested with us before, and to bring in many new top-tier limited partners. We believe that our role as co-investors in Fund VI is key to supporting alignment in our platform.”
The fund will focus on underperforming real estate that could benefit from a significant repositioning or renovation through Kennedy Wilson’s asset management programme.
“Institutional investors continue to show a strong appetite for real estate in West Coast markets, many of which are leading the country in job creation, wage gains and technology trends,” said Nicholas Colonna, president of commercial investments and fund management at Kennedy Wilson.
“The mandate for Fund VI gives us the flexibility we need to tap into our management, leasing and development expertise, and to pursue the upside opportunity of well-located assets in a relatively short time frame, while we keep a sharp focus on generating strong current cash returns for our investors.”
The fund is seeded with a portfolio of 12 multifamily, office, retail and other commercial assets with an aggregate purchase price of $1.1bn. Some $386m of equity has been deployed to date.
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