Kennedy Wilson has held an initial closing for its latest opportunistic real estate fund, Kennedy Wilson Real Estate Fund IV, which has attracted capital commitments totaling $118 million.
Initial investors in the Los Angeles-based real estate investment and services firm's fourth fund include, among others, a university endowment, a state pension plan, a private retirement fund and a fund of funds, the names of which were not disclosed.
Kennedy Wilson’s fourth fund is targeting total equity commitments of $300 million by its final close, which is scheduled for mid- to late 2012. The fund expects to achieve IRRs in the high teens from its investments, although the Kennedy Wilson’s historical track record has exceeded that return target, according to the firm.
A source familiar with the situation said the fund will seek investment opportunities in all property types throughout the US, with a particular focus on the West Coast and Hawaii. The firm's funds typically co-invest with other strategic buyers, providing them with the ability to make larger overall investments, the source noted.
Despite being early in the fundraising process, Fund IV already has made its first investment, acquiring a 1,008-unit multifamily community in San Pablo, California, for $140.5 million. The purchase of Bella Vista at Hilltop, which occurred earlier this week, is the largest single multifamily asset transaction by unit count in the US thus far this year, according to Real Capital Analytics.
Fundraising for Fund IV comes on the heels of a successful fundraising and investment campaign for Kennedy Wilson Real Estate Fund III. That fund closed on $125 million in equity commitments in August 2010 and is fully invested.