Prudential Real Estate Investors (PREI), known as Pramerica in Europe, has raised $629m (€559m) for a senior housing fund.
Four new investors, including US public and corporate pension plans, backed the investment manager’s Senior Housing Partners V fund, committing $199m.
PREI said it exceeded its initial target of $500m for the closed-ended fund. Ten existing investors backed the fund with $431m.
Noah Levy, head of PREI’s senior housing business, said the sector is now a “viable property type” for many pension funds in the US.
“This certainly wasn’t the case when we started our senior housing business in 1998,” Levy said.
Total capital available to invest for the fund will be in excess of $1bn, he added.
“This is likely be the case as we have a maximum 65% leverage on a portfolio basis,” Levy said. “There are no assets in the fund now, but we are hopeful of having 30 to 40 assets in the fund over time.”
The fund will invest in the independent, assisted-living and memory-care segments of the senior housing industry. PREI said the fund will employ a flexible investment strategy targeting direct acquisitions, forward commitments, developments, mezzanine loans, and other opportunities.
”We are planning to invest the capital in a variety of markets around the US.
“This would include the West Coast, the Northeast, Mid-Atlantic and some deals in the Midwest.”
The fund will buy existing properties and invest in new projects, Levy said.