Waterton returns to fundraising trail – Exclusive

The Chicago-based firm is seeking almost $240m more for its latest value-added vehicle than the predecessor fund.

Waterton Associates is back in the market with its latest vehicle, seeking $750 million for Waterton Residential Property Venture XIII, PERE has learned.

The Chicago-based private equity real estate firm, which declined to comment, started marketing the value-added vehicle in the summer, according to sources familiar with the fundraising process. Waterton has a $1 billion hard cap for the value-add vehicle and is using an undisclosed placement agent for foreign investors. With Fund XIII, Waterton is continuing its US-focused strategy of acquiring and upgrading multifamily properties in primary markets. Similar to the predecessor vehicle, the firm is targeting a 13 percent net internal rate of return.

Waterton closed Fund XII in October 2015 on $511 million, PERE previously reported. The firm launched the vehicle in the spring of 2013, around the same time it hired its first dedicated in-house investor relations professional, Michelle Wells, formerly of RREEF. Investors in Fund XII included Oregon Public Employees’ Retirement Fund, which earmarked $100 million, and Orange County Employees Retirement System and Employees Retirement System of Texas, which each allocated $75 million, according to PERE data.

Waterton’s last publicly-available transaction was the November sale of Lakeview Cove (pictured), a 224-unit garden apartment in Fort Lauderdale, Florida, according to data provider Real Capital Analytics. Waterton bought the property in June 2011 for $26.4 million and sold it for $36.5 million to West Palm Beach, Florida-based investment manager Priderock Capital Partners.

Waterton, founded in 1995 by David Schwartz and Peter Vilim, manages about $4.5 billion, according to its website. The firm had raised and invested a number of smaller investment vehicles with institutional investors and family offices prior to raising its first large commingled real estate fund, Waterton Residential Property Venture XI, in a single, $500 million close in February 2011.