San Francisco Employees Retirement System (SFERS) has placed $70m (€65.4m) into the Alterra IOS Venture III fund.

As previously reported, Alterra Property Group is seeking to raise $750m and an $850m hard cap for its latest US industrial outdoor storage (IOS) fund.

IPE Real Assets understands that SFERS had originally pledged $75m to Venture III but had to scale back its commitment to $70m due to overwhelming investor interest in the fund expected to have a final close in the first quarter of 2024.

As previously reported, Ventura County Employees’ Retirement AssociationOhio Police & Fire Pension Fund and New Mexico State Investment Council have each committed capital to the fund which is expected to be oversubscribed.

Industry sources indicate that failing to fully accept capital commitments is an uncommon practice in the current US capital-raising environment where many fund managers are encountering difficulties in securing capital for their funds.

Venture III will target IOS properties used for services like storage, truck parking, equipment repair, container yards and building materials.

The fund targets a net internal rate of return of 14% to 16% and a 1.7x to 1.8x net multiple on invested capital.

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