Rialto Capital Management has held a first close for its third opportunistic real estate fund. The Miami-based private equity real estate firm said Tuesday that it garnered $510 million in commitments for Rialto Real Estate Fund III.
The firm has co-invested $100 million in the vehicle, the same amount it put into the fund’s predecessor. Rialto declined to comment on the fund’s target size or return. Rialto Real Estate Fund II closed in December 2013 with $1.3 billion in investments.
On a September earnings call with investors, Stuart Miller, the firm’s chief executive officer, said the latest fund’s target is larger than the size of Fund II.
Rialto used the same investment strategy for its first two funds, investing in distressed real estate assets and commercial real estate backed securities. For example, in September, Rialto formed a joint venture to buy a $30.5 million Los Angeles office building, and it loaned $35 million last month to the Matrix Realty Group to purchase an Alabama office park.
Commitments for the second fund came from a mixture of endowments, foundations, public and private pension funds, global financial institutions, family offices, fund of funds and insurance companies. Investors in Rialto Real Estate Fund II included private equity investment firm Siguler Guff, which committed $50 million, according to PERE Research & Analytics.
Rialto is a subsidiary of publicly-traded housebuilder Lennar Corporation. It was founded by Jeffrey Krasnoff in 2007 to take advantage of the turmoil in the residential market.