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Kayne Anderson to target healthcare real estate investments with $1.8B fund

Kayne Anderson Real Estate Advisors raised $1.8 billion for its fifth opportunistic equity fund, excluding capital from the general partner and its affiliates.

The Kayne Anderson Real Estate Partners V fund is the firm's largest investment vehicle to date, drawing capital from pension funds, foundations, endowments and corporate investors, as well as high-net-worth individuals and family offices. The fund will target seniors housing and medical office and student housing investment opportunities.

The private equity firm said more than 20% of the fund has been deployed thus far.

The latest funding close should allow the firm to double down on its investment strategy targeting the U.S. baby-boomer population, according to The Wall Street Journal.

The Journal noted that real estate investment trusts that specialize in healthcare-related properties have historically traded at a higher premium than other real estate categories, making stock-market investors wary of the sector. Green Street Advisors Managing Director Michael Knott, however, told the publication that this trend has changed since the start of 2018.

The private equity firm has been able to avoid healthcare property pitfalls in part by partnering with top seniors housing operators and targeting higher-end clients in "supply-constrained" areas, the publication quoted Kayne Anderson Real Estate CEO Al Rabil as saying.

Kayne Anderson Real Estate Advisors is the real estate private equity arm of Kayne Anderson Capital Advisors LP.