Heitman has completed the capital raise for its third value-add vehicle, Heitman Value Partners (HVP) III. The fund attracted approximately $500 million in total equity, beating an initial target of $400 million. The vehicle, however, was considerably smaller than its predecessor, HVP II, which raised $800 million in 2007.
The Chicago-based real estate investment manager has already invested or committed about 40 percent of HVP III, which has an investment capacity of approximately $1.5 billion over the next three years. Heitman had been marketing the fund since 2011, and held a first close of $137.5 million in July 2013, according to filings with the US Securities and Exchange Commission. Limited partners in the fund included Public Employees’ Retirement System of Mississippi, Missouri Education Pension Trust and Memphis Light, Gas & Water Retirement and Pension Fund, according to documents from those pension plans.
The Heitman Value Partners (HVP) fund series was launched in 2003 and raised $1.9 billion since inception. The strategy is focused on investing across traditional and specialty property types that call for physical, operational or financial improvements. Such investments typically are executed through property-level joint ventures with public and private real estate operating companies in the US.
“As with its predecessor funds, demand for HVP III was supported by a broad group of our existing clients. Their endorsement was critical to Heitman achieving this outcome in today’s competitive capital raising environment,” said Maury Tognarelli, Heitman’s chief executive, in a statement. “Additionally, we are excited for the opportunity to develop strong and lasting relationships with the new clients who supported this strategy.”
Heitman also is understood to be raising its first real estate mezzanine debt fund, Heitman Real Estate Debt Partners. The firm gathered $110 million in the initial close of the fund last year, according to SEC filings.