InsightsKAP’s insights on private equity investor relations and fundraising
Welcome back to the weekly Re-KAP where we round up market and LP news from the RE PE marketplace (Jan. 10, 2018)
StepStone Real Estate has agreed to buy Courtland Partners, a year after possible sale discussions began. The combined group will be called StepStone Real Estate (SRE) but may continue to do business at Courtland, a StepStone Company for up to two years. SRE currently comprises 24 dedicated staff and will double in size with the addition of 26 professionals from Courtland. The entire Courtland team, including its legal, finance and administration departments, is expected to join SRE.
Pensions Take Tougher Stance Against Fund Subscription Lines. In response to managers’ increasing reliance on subscription lines to boost returns over the past several years, pensions and endowments – including CalPERS – are developing rules to limit use of this type of leverage.
CAPITAL RAISING UPDATES
IREI released its Q4 2017 “First Look” Fund Tracker Report. Of note, only 19 funds have so far reported a final closing in Q4 2017, raising an aggregate of $13.6 billion. At this time last year, 24 funds were reporting an aggregate fundraise of $19.3 billion. That amount has since increased to $26 billion raised by 45 funds, as additional data was captured (see chart below) and it is likely that the reported total for 2017 will also increase in the next few weeks.
Angel Oak Capital Advisors raised almost $300 million for its debut RE debt vehicle. The firm’s first private real estate debt fund closed above its $250 million target. The fund, Angel Oak Real Estate Investment Fund I, closed on $291 million and will invest primarily in non-qualified mortgages, which the firm said allows “creditworthy borrowers” that haven’t obtained funding from traditional sources to access a mortgage.
Morgan Stanley held a $2.73 billion final close for its twelfth opportunistic real estate fund. North Haven Real Estate Fund IX Global, known in the market as G9, exceeded its $2.5 billion target and is $1 billion more than the firm raised for its predecessor fund. The fund took approximately 11 months to raise including a first closing on $1.9 billion last February. G9 is an opportunistic real estate investment vehicle that invests in properties globally.
Aegon Asset Management held a $100 million final close on affordable housing debt vehicle. The debt fund will make investments in 32 loans across 13 states. It is backed by six investors and Bank of America Merrill Lynch acted as placement agent.
American Realty Advisors adds Shelley Santuli to their portfolio management team. Santulli has joined the firm as Executive Vice President, Portfolio Management. In this role, Ms. Santulli adds to the team developing and executing strategy for ARA’s value added fund and will work with senior leadership on new product development and strategic business initiatives. Ms. Santulli brings over 26 years of experience in real estate investment management with nearly 20 years on the principal side of institutional investing. Most recently, she was Managing Director, Head of Strategy and Business Development at Berkshire Group.
Coller Capital hires fundraising veteran Remy Kawkabani as a partner. Kawkabani previously held several senior positions at Credit Suisse, where he was responsible for the origination and structuring of private equity funds. He served as a Managing Director and Chief Executive Officer of Credit Suisse Asset Management for the EMEA region before leaving the bank to head up the EMEA business for New York-based private equity firm Siguler Guff.
Harvard Management Company sold its majority stake in a 13-building portfolio to Blackstone Group for $243.6 million, in one of New York City’s big year-end multifamily deals. Harvard had owned the properties, which are spread through Manhattan and Queens, in partnership with multifamily giant A&E Real Estate Holdings and investment manager Edge Principal Advisors.
CPPIB, GIC student accommodation JV buys $1 bn Harrison Street Real Estate portfolio. A joint venture between the Canada Pension Plan Investment Board and Singapore sovereign investor GIC, Scion Student Communities, has bought a 22-property student housing portfolio from Harrison Street Real Estate Capital in a deal worth about $1 billion. The portfolio comprises about 12,000 beds across 18 states and involves 20 leading national universities. CPPIB and GIC launched Scion two years ago and immediately signed an agreement to acquire University House Communities Group, a student housing portfolio in the U.S., for about $1.4 billion.
LIMITED PARTNER NEWS
Ohio Bureau of Workers’ Compensation has committed $50 million to Gaw Capital’s U.S. Value Add Fund III. The fund focuses on opportunities in retail and hospitality properties in the Western U.S. The $25.3 billion insurance company currently allocates 8.85% of its total assets to real estate, below its target of 12%.
New Mexico State Investment Council (NMSIC) is considering committing $150 million to two real estate funds. According to the Board’s agenda for the January 9 meeting, the two funds in consideration are Ares European Real Estate Fund V and Almanac Realty Securities VIII. NMSIC’s current target allocation to real estate is 10%. In the third quarter, the Investment Council approved an increase to the real estate allocation from 10% to 12%. NMSIC’s 2Q17 real estate market value represents 9.2% of total fund assets.