Invesco Real Estate is expected to conclude fundraising for its latest US value-add real estate fund next month, according to a prospective investor.
North Dakota State Investment Board (SIB) said in a board meeting document that Invesco US Value-Add Fund V, which is seeking to raise $1bn (€885m), has so far secured $800m.
David Hunter, CIO of North Dakota SIB, told IPE Real Assets that the pension fund is planning to invest $70m in the fund.
As previously reported, Contra Costa County Employees’ Retirement Association and Teacher Retirement System of Texas have also committed capital.
“We believe that now is a good time to put capital into value-add real estate given where we are in the late stage of a real estate cycle,” Hunter said.
“We feel comfortable investing with Invesco as we have a 20-year investment history with this manager.”
Hunter also said the pension fund intends to allocate a similar amount to value-add real estate next year.
“We are planning to make another $70m commitment sometime during the first six months of next year that will more than likely be made into a value-add fund.
“We are looking to fill out our value-add portfolio for real estate. Our overall investment plan calls for 65% core and 35% value-add.”
The Invesco fund is targeting returns of 11-14% by investing in US apartment, office, industrial and retail assets that need recapitalisation, renovation and re-tenanting, as well as developments.
Around 40% of the capital raised for the fund has already been used to acquire assets or commit to acquisitions.