Brookfield Asset Management and Fairfield Residential Company have held a final close on the Brookfield Fairfield US Multifamily Value Add Fund, which amassed a total of $323 million in commitments, surpassing its initial $250 million target.
The firms launched the fund in 2011 and held a first close of $151 million in July of that year, according to a filing with the US Securities and Exchange Commission. Limited partners in the initial close included the California State Teachers Retirement System (CalSTRS) and Australia’s Future Fund, both of which committed $50 million, according to sources familiar with the matter. Additionally, Brookfield and Fairfield made a $50 million co-investment to the fund.
The fund, which is pursuing a value-add strategy, seeks to acquire undervalued or underperforming apartment properties for renovation, repositioning and operational turnaround in infill or supply-constrained locations in the US. The vehicle, which currently is 50 percent invested, is targeting deals requiring $15 million to $30 million in equity, sources said.
“We believe that the current environment offers attractive investment opportunities as a result of both a limited new supply of apartment properties and strong potential growth in rental demand in major markets across the United States,” said David Arthur, Managing Partner at Brookfield Asset Management, in a statement. “We are confident that the combination of Fairfield’s multifamily expertise and Brookfield’s sponsorship will enable the fund to successfully capitalize on these opportunities.”
Brookfield, in partnership with Fairfield management and CalSTRS, took control of the Fairfield Residential in 2010, acquiring a 65 percent equity stake in exchange for investing approximately $29 million to recapitalize the company. Fairfield, based in San Diego, currently is Brookfield’s platform for US investments in multifamily properties.
Brookfield declined to comment, but sources said the firm initially had envisioned the vehicle as a club fund with five investors. The fund required a minimum initial investment of $25 million from LPs, but the firm focused its fund raising efforts on investors that would commit at least $50 million, with the goal of having at least 50 percent of the capital coming from US investors. However, after the first close, Fairfield is said to have secured all or most of the remaining commitments on its own, from investors that included The Townsend Group.