Private equity firm Kayne Anderson has reportedly closed the first round of a new fund worth $1.53 billion for a seventh flagship opportunistic fund partly targeting senior living communities.
The target for the fund, reportedly called Kayne Anderson Real Estate Partners VII, is $3 billion. As it has done before, the firm is planning to target property types including senior housing, student housing and medical office properties. According to PERE News, which first reported on the fund, the firm plans to close the fund in the first half of next year with an internal return rate of 15% to 18%.
According to PERE, the fund is expected to spin up over the next 18 to 24 months, and data showed it may come in as the third-largest fund in the market currently targeting multiple non-traditional sectors.
Kayne Anderson has supported other similarly large funds in the past, including a $1.9 billion fund partly targeting senior housing in 2022.
Senior living M&A is still primarily being driven by distress in 2024 as buyers and sellers continue trying to come to terms. Although interest rates are still complicating new deals, there are some signs that relief may be around the corner in the form of interest rate cuts.
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