(Bloomberg) -- Bain Capital Real Estate has closed a $3 billion fund, nearly double its initial target, as investors bet that U.S. property deals will provide high yields and inflation protection. 

With leverage, the fund has the potential to invest as much as $9 billion in a mix of industrial, life science, entertainment and residential real estate, according to Dan Cummings, head of the Bain property unit, who joined the firm in 2018 from Harvard University’s endowment.

It’s the second real estate fund for Bain, and twice the size of the first. About one-third of its capital has been deployed. Projects backed so far include construction of single-family rental houses in Texas, an entertainment-production campus at the site of an old Sears store in Los Angeles, and a life sciences complex south of San Francisco.

Private equity firms have been hoarding dry powder to buy real estate, which offers an inflation hedge because rents can adjust to offset rising purchase prices, interest rates and other costs. Funds in North America have a record $225 billion in unspent money raised for property deals, according to Preqin.

“Despite today’s current prices,” Cummings said, “we continue to source compelling investments with attractive yields, prospects for future income growth and inflation protection.” 

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