Hammes Partners is targeting a $600m (€561.6m) capital raise for its latest real estate fund, according to sources.
The new capital raise would be $170m more than the amount the manager raised for Hammes Partners II in July 2015.
The New Mexico Educational Retirement Board is an initial investor in the fund, planning to commit as much as $50m.
Hammes III will have a value-add investment strategy focused on the healthcare sector.
It will be investing in a mixture of US medical office buildings and ambulatory centres.
The fund will either buy existing assets and improve them or invest equity in new development projects.
New Mexico and other investors’ interest in the fund has been fuelled by growing demand of the elderly-care market.
The 65-and-over population will jump from 40m in 2010 to 55m in 2020, a 36% increase, creating more need and space for additional US healthcare-related real estate.
The pension fund made two commitments Hammes Partners II fund totalling $50m in 2013-14.
As stated on New Mexico’s website, the investment has produced a return of 11.43%.
The pension fund is likely to place capital with managers it already has a relationship with, one that has produced strong returns and where the manager is sponsoring its next fund.
New Mexico is looking to invest capital in another 2-3 funds this year.
Commitments would be around $30m-50m.