Alterra Property has raised $925m (€866.7m) for its US and Canada industrial outdoor storage (IOS) fund, exceeding its target.
The real estate manager said the capital commitments for Alterra IOS Venture III exceeded the fund’s original $750m target and its $850m hard cap. Alterra raised $524m for Venture II, the previous fund which closed in March 2022.
Alterra said limited partners in the fund included a diverse mix of pension funds, endowments and foundations, sovereign wealth funds, asset managers, family offices, and high-net-worth individuals.
As previously reported, San Francisco Employees Retirement System placed $70m into Venture III. Fellow US institutions Ventura County Employees’ Retirement Association, Ohio Police & Fire Pension Fund and New Mexico State Investment Council each committed capital to the fund.
Venture III, a continuation of Alterra’s IOS investment strategy launched in 2016, is expected to focus on infill properties in major markets across the US and Canada.
Matthew Pfeiffer, managing partner and CIO of Alterra, said: “Alterra’s national scale, proven track record, and vertically integrated team contributed to a strong capital raise in a challenging market for real estate. The IOS sector is a $200bn market that is highly fragmented and opaque due to the lack of institutional ownership and available market data.
“As a first mover in the space, Alterra has acquired over 250 properties across 30-plus states, providing Alterra unique insights into the market.”
Pfeiffer added that Venture III is the largest IOS dedicated pool of discretionary capital raised to date and “will help deepen our competitive advantage as we look to further institutionalise the IOS sector”.
Rob Kohn, a partner at Park Madison Partners, which served as the exclusive placement agent, said: “The institutional investor support for Alterra and Venture III has been an outlier to the larger market.
“The last 12 months has been perhaps the most challenging fundraising environment since the Global Financial Crisis, so raising $925m for Venture III is a real testament to both the IOS market opportunity and Alterra’s leadership in that space.
“The speed to final close was also impressive. The entire investor allocation was more or less spoken for within eight months of launch, versus the current industry average of 24 months.”
Leo Addimando, founder and managing partner and CEO of Alterra, said: “We believe IOS represents a generational investment opportunity to aggregate and institutionalise an attractive niche industrial property type.
“We made the strategic decision years ago to be an early mover in the IOS space, and we are deeply appreciative of the continued support we’ve received from the investor community and their advisers.”
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