Bain Capital is raising money for a third real estate fund with a $3.75B target, a goal that would surpass its prior fund by 25% even as fundraising activity is down across the market.

The fund was registered last year, according to a Securities and Exchange Commission filing, and new details about its financial targets were revealed in a presentation last week to the New Mexico State Investment Council.

At the meeting, the state's main investment vehicle voted to approve a $150M investment in Bain's third fund, according to an agenda summary first reported by IPE Real Assets.

Investment strategy manager The Townsend Group, hired by the New Mexico Investment Fund to assess the investment option, said a target return from the fund would be in the mid-teens.

According to the documents, Boston-based Bain Capital intends to invest the fund in similar asset classes as its previous two funds, including life sciences, medical office, senior housing, last-mile industrial, self-storage, affordable housing — specifically horizontal housing and single-family rental — and media/content creation space. Bain plans to invest 75% of the fund into North American assets and 25% into other regions, according to the presentation.

The strategy for Bain's third real estate fund is similar to its previous two, which launched in 2018 and 2022, according to SEC filings. Bain Capital Real Estate's overall investment thesis focuses on “difficult to access sectors at the nexus of emerging economic and demographic trends,” according to its website.

A Bain Capital spokesperson declined to answer additional questions about the fund.

Bain entered real estate investment in 2017 when it brought on managers from Harvard Management Co.'s real estate team. It registered its first real estate investment fund in 2018 and its second in 2020, according to documents filed with the SEC. Its first fund closed in July 2019 at $1.5B, and its second closed at $3B in December 2021.

In June 2022, Bain Capital Real Estate joined with Catalyst Healthcare Real Estate to break ground on a 60K SF medical office building in Laurel, Maryland. In December 2021, it acquired three infill properties across the D.C. area totaling over 500K SF for $90M in conjunction with Oliver Street Capital.

Bain's higher target for its third real estate fund comes as investment into the sector has slowed globally. In the first quarter, global real estate fundraising activity was down 42% from the same quarter last year, according to PitchBook. But some investment managers have maintained strong fundraising, including Artemis Real Estate Partners, which closed a $2.2B fund last month, exceeding its $1.5B target.