Global real estate investment manager Heitman has raised $2.6bn (€2.22bn) for its latest North American value-add strategy, supported by over 30 investors from seven countries.
Heitman Value Partners Fund VI (HVP VI) exceeded its $1.75bn target to reach a $2bn hard cap alongside $620m in additional co-investment commitments.
Heitmant raised $1.9bn for the previous fund in the series, which closed in July 2021.
With the inclusion of leverage, Heitman said the latest strategy will have $6.55bn in capital to deploy to assemble the fund’s portfolio over the next few years.
As previously reported, Heitman secured institutional support for the vehicle, including a $100m investment from Maryland State Retirement and a $75m commitment from Mississippi Public Employees Retirement System. The Chicago Public School Teachers’ Pension and Retirement Fund also disclosed it made a $30m commitment to the Heitmant fund.
In September, IPE Real Assets reported that UK local government pension scheme pool Border to Coast Pensions Partnership had committed $90m to the fund.
HVP VI’s seeks to deliver a return of 12-14% net of fees and costs through a diversified approach that combines delinked, growth-oriented and contrarian investment opportunities.
The strategy focuses on demographically-driven and less cyclical alternative sectors, including medical office, student housing, senior housing and self-storage, complemented by traditional growth sectors such as apartments and industrial, the manager said.
Maury Tognarelli, Heitman CEO, said: “We are pleased to announce the final close of HVP VI and are grateful for the confidence and trust our new and existing investors place in us. We view this phase of the cycle as an attractive entry point. Strategies underpinned by secular trends that generate returns from a combination of income and value creation opportunities continue to remain compelling.”
Mike Trench, EVP and co-portfolio manager of Heitman’s value series, said: “In a period of continued market dislocation, investors are increasingly looking for partners with deep experience and cycle-tested strategies.
“HVP VI is designed to capitalise on the resilience of non-correlated sectors and the emerging opportunities created by today’s capital markets environment.”
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