Nuveen Real Estate’s open-ended US multifamily fund is preparing to take on development risk as it nears the $2bn mark.

The US Cities Multifamily Fund was launched in 2019 with an initial $550m capital raise and a seed portfolio of nine assets.

Nikita Rao, the portfolio manager for the US Cities Multifamily Fund, said: “The gross asset value of the US Cities Multifamily Fund will be at $1.7bn once a transaction in July has been closed. The portfolio will have a total of 19 properties spread out across the US.”

As previously reported, Nuveen expected the fund’s value to reach $2bn two years after launch.

Rao said the fund will begin to consider making some non-core investments once the portfolio value nears the $2bn mark.

This could be value-add or development multifamily and by investing capital into single-family rental, student and senior housing.

“The allocation for non-core investing for the fund is up to 25% of the fund’s portfolio,” Rao said.

The State of Wisconsin Investment Board (SWIB) said in a meeting document that it has made a $100m (€82.5m) commitment to the Nuveen fund.

SWIB told IPE Real Assets that the fund, which has a diversified multifamily portfolio across the country, targets a high single-digit return.

To read the digital edition of the latest IPE Real Assets magazine click here.