Walton Street Capital has finished raising capital for its latest real estate fund, securing $1.31bn (€1.14bn) in commitments, shy of its $1.5bn target, according to industry sources.
Investors in the fund include Maine Public Employees Retirement System, which committed $50m, and Santa Barbara County Employees’ Retirement System, which committed $10m.
Sources said the fund failed to hit its capital-raising target because many US pension funds are becoming more conservative with their real estate investments.
Walton Street Real Estate Fund VIII is pursuing an opportunistic strategy, targeting double-digit returns (17% net and 23% gross) by making a combination of debt and equity investments in real estate.
Walton Street, which is co-investing $40m in the fund, said it had already committed half of the fund’s capital to investments.
Most of the capital will be invested in the US, with a focus on major markets like San Francisco and Chicago. Walton Street can invest 5% to 10% in Europe.
It will be targeting office, industrial, retail, apartments and hotel assets. Existing and development assets will be considered.