Waterton has raised $1.46bn (€1.17bn) of equity for Waterton Residential Property Venture XIV, according to a board meeting document of the San Diego City Employees’ Retirement System (SDCERS).
Last year, IPE Real Assets reported that the US real estate firm was seeking to raise $1.25bn for the apartments-focused vehicle.
SDCERS is considering committing $30m, which would take the fund close to its $1.5bn ‘hard cap’.
A final close is expected to take place this month.
Waterton declined a request for comment.
According to SDCERS, $300m of the fund’s equity has already been invested or allocated to investments.
This includes the $147m purchase of four apartment complexes in Atlanta, a transaction underwritten with a net internal rate of return of 12.9%.
Three other properties in California also under contract, tying up $125m of equity.
The Californian transactions would form part of the fund’s discounted/distressed strategy targeting urban markets, which will make up 20% of the fund’s activities.
Waterton has identified the San Francisco Bay Area as a target market for this strategy. According to the SDCERS report, Waterton told the pension fund that rents here had fallen by more than 15% and were affecting property values.
The fund will also look to convert other types of properties, such as hotels, into apartments.