Raith Capital Partners expects to raise $700m (€616.7m) for its latest US value-add real estate fund, according to an investor.
Rhode Island Employees Retirement System disclosed in a board meeting document that it had made a $30.9m commitment to Raith Real Estate Fund IV, a fund expected to have its first close in the current quarter.
Raith Capital is expected to issue a co-investment amounting to 1% of the fund’s total capital.
The manager raised $446m for Fund III, the previous fund in the series, which reached $540m with the addition of co-investment capital.
Fund IV targets a net internal rate of return of 12% to 14%. This return will have 30% to 40% coming from current income and 60% to 70% from appreciation.
The fund expects to use leverage of up to 70% loan-to-value. The target returns are generally based on an expected holding period of three to five years.
Fund IV will target recapitaliation and refinancing deals across all sectors, including distressed loans and end-of-the-fund-life sales and lender-driven recapitalisations.
The fund, which will mainly focus on industrial and residential sectors, will also consider investments in essential retail, industrial outdoor storage, data centre and self-storage properties.
Raith Capital did not respond to a request for comment.
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