UNITED STATES - US-based pension funds were among the biggest investors to Canyon-Johnson Urban Fund III, which has received equity commitments from investors totaling $1bn (€627.4bn).
California Public Employees Retirement System and California State Teachers Retirement System each put $225m into the latest from Canyon Capital Realty Advisors while Oregon Public Employees Retirement Fund also made a $50m contribution.
Bobby Turner, managing partner on the commingled fund, said investors signed up because they believe Canyon Capital can access deals other managers for urban assets other managers are unable to achieve.
"We now have an investment pipeline for future deals totaling $2.2bn. Our track record has now created a situation where cities are now contacting us about building a new urban project rather than us contacting them," said Turner.
The urban niche is still a major investment theme in the United States but there are many US cities looking to improve their urban areas as demand is still strong for a good segment of the population to live, work and shop in an urban setting.
One group said to prefer an urban setting is the "eco boomer", described as being in the 20-30 age bracket, who desire an urban lifestyle.
This section of the population is expected to grow by five million people over the next few years, so the Urban Fund III, a joint venture with Canyon Capital and Earvin "Magic" Johnson, is hoping to tap into this.
The commingled fund will have a total capitalization of $4bn to invest in urban projects over the next four years.
Most of the investments are expected to be in new development projects but there could also be some deals where it buys an existing asset and plans a redevelopment.
All of the investments will be US-based, with particular focus on Los Angeles, Chicago, Cleveland, Houston, Atlanta and Washington DC, and most of the projects will involve building a mixture of housing and community-serving retail.