Brookfield Asset Management has raised $503m (€408m) for its latest US multifamily fund, managed jointly with its US housing platform Fairfield Residential Company, according to one of its investors.

The Ohio Bureau of Workers’ Compensation is committing $75m to Brookfield Fairfield US Multifamily Value Add Fund III, it was revealed in a board meeting report.

Brookfield is co-investing $300m in the fund, while Fairfield will also provide 5% of aggregate commitments up to $30m.

Fairfield is majority-owned by Brookfield and minority-owned by the California State Teachers’ Retirement System.

The fund will acquire lower-quality assets in supply-constrained markets before improving and selling them.

It will also be able to take on some development, but this will be restricted to 30% of the fund and limited to markets where there is a shortage of newly-built core assets.

Key markets will include Florida, Georgia, Texas, Connecticut and Washington DC.

The target returns for the fund are 12-13% net and 14-16% gross, with a gross multiple of 1.8x. A cash-on-cash return of 4-6% is projected during the holding period of the fund.