Mesirow Institutional Real Estate Direct has raised $1.245bn (€1.1bn) for its latest US apartment fund.

The capital raised for the Mesirow Financial Real Estate Value Fund V exceeded the fund’s $1bn target and $1.2bn hard cap.

The fund’s investors include Connecticut Retirement Plans and Trust Funds which committed $150m and the Teachers’ Retirement System of Louisiana which added $125m to the fund.

Alasdair Cripps, Mesirow’s CIO, said: “We are proud and humbled by the continued support and confidence of our investors as we expand our platform of value-add, risk-balanced multifamily real estate strategies.”

Fund V’s primary investment strategy involves acquiring underperforming Class A and B multifamily assets at a discount to their replacement cost. The portfolio’s potential breakdown includes 40% to 50% in heavy value-add repositioning, 20% to 30% in light value-add enhancement, 0% to 10% in value-add purchases and 15% to 25% in ground-up development.

The fund expects to acquire using cash and with a portfolio-level loan-to-value ratio of up to 65%.

Fund V is expected to make 20 to 25 total investments, with an expected holding period of four to six years per investment.

To read the latest IPE Real Assets magazine click here.

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