Lubert-Adler attracts Kentucky in second round of fundraising

Lubert-Adler has sought to raise more capital from existing investors, including Kentucky Retirement Systems, for its Real Estate Fund VII.

The closed-ended fund, which invests in apartment, retail and mixed-use assets in the US, had previously attracted $75m (€69.7m) from Kentucky Retirement Systems.

Andy Kiehl, director of real estate and real return assets at Kentucky Retirement Systems, told IPE Real Estate: “Lubert-Adler decided to do a second round of fundraising.

“It gave the initial investors in the fund the opportunity for first right of refusal to place for the new capital raise.

“We were one of those investors as we had made an initial $75m commitment into the fund.”

Lubert-Adler, which did not comment, has created a new vehicle, Real Estate Fund VII B.

Kentucky Retirement Systems is also investing $100m in a real estate fund managed by Fundamental Advisors.

Fundamental Partners III invests in the distressed debt of real estate assets that include affordable housing, student accommodation, senior care, infrastructure, alternative energy and hospitality.

Kiehl said: “The investment with Fundamental Advisors represents a new relationship for the pension fund.

“One part of the fund’s strategy that is unique is that it places capital into debt that could become municipal bonds where the manager could at some point in the future own the real estate that is secured by the debt.”

Fundamental Advisors, which did not comment, is seeking to raise between $650m and $750m for the fund.

It will target a net internal rate of return of 12-14% by investing mostly in the US – up to 15% can be invested overseas.

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • DS-2343

    Closing date: 2017-09-29.

Begin Your Search Now