August 15, 2023
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Across private capital strategies, fundraising in 2023 tracked well behind the same period in 2022 in terms of funds and total capital raised
MetLife Investment Management announced on Tuesday the close of its MetLife Single Family Rental Fund with $390 million in committed capital, a sign of confidence in the shaky rental market.
The fund will focus on acquiring and developing single-family rental units across the US. It is also the MIM real estate equity team's first closed-end vehicle.
The close comes at a pivotal moment for the rental market, which faced volatility in 2022 and Q1 2023: Elevated rent expenses discouraged potential renters and caused rent growth to slow during the period, according to the FDIC's 2023 risk review, which was published Tuesday.
Still, inflated single-family housing prices kept would-be first-time homebuyers in the rental market. In Q1 2023, PitchBook analysts deemed residential real estate a dominant sector focus among the top 10 largest real estate funds that were expected to close. And while the sector remains dominated by multifamily rentals, single-family rentals have become more prevalent in private market funds.
James Ray, portfolio manager at MetLife Investment Management, said the fund is focused on creating value through real estate development, which he said is less sensitive to interest rate fluctuations than the ebb and flow of renter demand.
Across private capital strategies, fundraising in 2023 tracked well behind the same period in 2022 in terms of funds and total capital raised, according to PitchBook's Q1 2023 Global Private Market Fundraising Report. And real estate was no exception. From Q1 2022 to Q1 2023, total capital raised in the sector dropped 43.8%.
MIM, the $590 billion asset management business that invests in public fixed income, private capital and real estate on behalf of the insurance behemoth MetLife, raised capital from a global group of institutional investors, according to a statement.
"We reviewed 100+ potential deals before circling the fund's first few investments and will remain patient and focused, but we are beginning to see some of the benefits that come with having dry powder in a challenging environment," Ray said.
MIM's real estate platform includes commercial mortgage loan and real estate equity strategies and encompassed $111.2 billion in AUM as of the end of March.
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