LaSalle Investment Management is targeting a $1.25bn (€1.21bn) capital raise for its latest US value add real estate fund, according to an investor.

Arkansas Teacher Retirement System disclosed in a meeting document that it had approved a $75m commitment to LaSalle Value Partners US IX, a fund which had a first close in June.

LaSalle is expected to contribute 2.5% of total fund commitments as co-investment. The fund’s hard cap target is currently unknown.

LaSalle raised $832m in 2020 for the previous fund in the series.

Unlike the previous funds which mainly focused on office, industrial, retail and apartments, fund IX, will limit its exposure to office and retail and will mainly target residential, industrial and healthcare-related properties.

The fund targets a 12 to 14% net internal rate of returns with a leverage component of up to 65% loan-to-value.

LaSalle did not respond to a request for comment.

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