Bouwfonds Asset Management has launched its third fund focusing on international institutional investors. Established in partnership with Fairfield Residential, one of the largest players on the US housing market, Bouwfonds US Residential Fund invests in a geographically and economically diversified portfolio of existing, attractively rented homes throughout the United States. The fund expects to generate a total return of at least 10%.
Portfolio
Bouwfonds US Residential Fund aims to expand its portfolio to USD 750 million within a period of 3 years. Its initial portfolio consists of 6 apartment complexes with a total value of approx. USD 145 million. Based on the current acquisition pipeline, the fund anticipates to make 3 acquisitions over the next 3 months which will push the value of the portfolio to over USD 250 million.
US rental market
Unlike the US owner-occupied market, the rental market in the United States currently provides good investment opportunities. Investing exclusively in a select number of submarkets, the fund’s strategy focuses on capitalising on rental growth potential. The relatively expensive owner-occupied sector has driven many residential consumers to move into the rental market. Investing in sub-markets in which rental homes are scarce but demand is high due to growing employment, the fund intends subsequently to increase rents substantially, and thus generate cash flow for its investors, through active property management.
Second closing
The fund was set up as a US private REIT. The initial closing of the fund attracted institutional investors from both the Netherlands and the United States. A second closing is scheduled in the first half of 2007. The fund will run for a maximum of 10 years, during which period all investments will be sold on the basis of active asset management. Bouwfonds US Residential Fund is an initiative of Bouwfonds Asset Management and Fairfield Residential LLC.
More information
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