Kayne Anderson to launch third RE fund

The Armonk, New York-based real estate firm is looking to raise $700 million to invest in off-campus student housing properties across the US.

Following the success of its last real estate fund, PERE understands that Kayne Anderson Real Estate Advisors, the real estate arm of Los Angeles-based private equity firm Kayne Anderson Capital Advisors, is set to hit the fundraising trail again with its third commingled real estate vehicle. 

Although representatives from Kayne Anderson declined to comment, sources confirmed that the Armonk, New York-based firm is set to launch Kayne Anderson Real Estate Partners (KAREP) III later this month. The opportunistic vehicle will seek $700 million in equity commitments from investors to target off-campus student housing opportunities in the US. 

KAREP III is seeking commitments from high-net-worth individuals, family offices, foundations, endowments and pension plans. One source noted that there’s a “great deal of investor demand” in the student housing asset class, pointing to an anticipated final close in May.

Kayne Anderson’s prior fund, KAREP II, held a final closing on $575 million in equity in October 2011, exceeding its initial target of $350 million. KAREP II was raised over the course of approximately one year, having held a first close in December 2010. 

Kayne Anderson still is investing on behalf of KAREP II, with approximately 75 percent of the fund’s capital accounted for. KAREP II is anticipated to be fully invested by the third quarter.

Kayne Anderson Real Estate Advisors recently was featured in PERE in an article highlighting 10 emerging real estate fund managers to watch. Formed in 2007 by Richard Kayne and Al Rabil, the firm specialises in value-added and opportunistic student housing properties in the US.