Cornerstone Real Estate Advisers is to conclude capital raising for its latest value-added real estate fund at $170m (€154m), below its $500m target, according to sources familiar with the matter. 

There are a number of investors in the Cornerstone Real Estate Fund X, including the City of Memphis Retirement System, which has committed $10m, according to board meeting documents.

One-fifth of capital raised came from MassMutual Life Insurance Company, the parent company of Cornerstone, which itself will co-invest 1% of total commitments.

As reported last year, MassMutual and investors advised by Strategic Investment Group committed $116m in total.

Fund X, which has $400m of capital when debt is taken into consideration, already owns three office buildings, including a building in Charlotte, North Carolina that Cornerstone bought for $84m.

It aims to invest in a mixture of office, industrial, retail and apartment assets in US markets with strong growth prospects and supply constraints.

According to sources, one issue Cornerstone faces is the performance of a previous vehicle, Cornerstone Real Estate Fund.

It delivered of approximately 18%, below some competitor funds that have produced returns in the range of 22% to 23%.

Cornerstone declined to comment.