Kennedy Wilson has closed its fourth fund, PERE has learned. Although representatives from the Beverly Hills-based real estate investment firm declined to comment, sources familiar with the matter said Kennedy Wilson has raised in excess of $300 million on behalf of its Kennedy Wilson Real Estate Fund IV.
Through the diversified commingled vehicle, Kennedy Wilson will seek investment opportunities in all property types throughout the US, with a particular focus on the West Coast and Hawaii. Through the fund, the firm typically makes co-investments with other strategic buyers.
Investors in Fund IV include the Illinois Student Assistance Commission, the Tennessee Valley Authority Retirement System and the West Virginia Investment Management Board, according to data from PERE Connect. The fund expects to achieve IRRs in the high teens from its investments, although Kennedy Wilson’s historical track record has exceeded that return target.
Fund IV held a first close of $118 million in June 2011. Around that time, Kennedy Wilson made its first investment on behalf of the fund with the acquisition of the Bella Vista at Hilltop, a 1,008-unit multifamily community in San Pablo, California, for $140.5 million. The firm’s previous vehicle, Fund III, closed on $125 million in equity commitments in August 2010 and is now fully invested.
In an interview with Kennedy Wilson last spring, the firm’s chief executive officer William McMorrow told PERE that the vast majority of its capital comes not from commingled funds but from separate accounts and joint ventures. “Although [funds are] a very important part of our business, most of our capital really comes from these separate account platforms,” he said.
Despite that focus on separate accounts, sources have told PERE that Kennedy Wilson currently is contemplating the launch of a fifth US real estate fund in the not-too-distant future. The firm also is considering the possibility of raising its first European-focused real estate fund, although both of those potential vehicles are only in the early planning stages.