InsightsKAP’s insights on private equity investor relations and fundraising
KKR closes $2B fund; Cortland, CPPIB and GIC form multifamily JV; Cadre signs equity deal with GS and more from the past week.
Jan 17, 2018: round up of news from the real estate private equity marketplace.
Cortland Partners, CPPIB and GIC form U.S. multifamily JV. The newly formed joint venture has a targeted equity amount of $550 million to acquire and renovate class B multifamily units in the U.S., primarily in the South and Southeast. CPPIB and GIC will each own a 45% interest and Cortland Partners will own the remaining 10%.
“Partnering with these first-class organizations solidifies our business model and proves that a class B multifamily investment strategy reflects smart money.” — Mike Altman, CIO, Cortland Partners
The Wall Street Journal recently reported on the appeal of the older suburban apartment sector, which may offer better risk-adjusted returns as the urban, luxury-apartment boom winds down.
“Their demand just stays constant, and rent growth is predictable. You don’t have big highs, and the downside is limited.” – James Martha, Head of TH Real Estate Multifamily Division
CAPITAL RAISING UPDATES
KKR closed a $2 billion real estate fund. KKR Real Estate Partners Americas II (REPA II), an opportunistic, value-added real-estate fund focused on senior-living and broader multifamily, has already committed or spent about $250 million of the capital raised. The firm’s first real estate fund, which closed in 2013 with $1.5 billion, is fully committed and has already returned 70% of its capital to investors. KKR made a big push into real estate in 2011 by hiring Ralph Rosenberg, an industry veteran who spent 17 years at Goldman Sachs.
“If you have a systematic approach, you can create a lot of value by investing capital and raising rents.” – Ralph Rosenberg, Global Head of Real Estate, KKR
Artemis Real Estate Partners raised $661 million for its third fund, suprassing its $500 million target. Artemis Real Estate Partners Fund III is a value-add/opportunistic fund that will invest in the U.S. with a focus on multifamily, office, industrial, retail, senior housing and self-storage. The fund’s predecessor held a $580 million final close in 201.
Singerman Real Estate held a $500 million final close. The Chicago-based opportunistic real estate investment firm, held a final close on SRE Opportunity Fund III, reaching its hard cap three months after its initial closing and exceeding its $400 million fundraising target. Fund III will focus on debt, distressed and opportunistic investments in all major asset classes across the U.S.
Conundrum Capital Corporation launches fund. The Canadian private equity investment management firm has launched its fifth multi-residential real estate fund, Q Residential Multi-Family Private Equity Fund V. This core-plus vehicle will invest in multifamily in major Canadian cities, with a focus on Ontario. The firm is seeking to raise approximately $240 million.
Cadre inks $250 million Goldman Sachs equity deal. The online real estate investment platform has agreed to a $250 million equity partnership with Goldman Sachs. Cadre focuses on deal-by-deal investments in U.S. commercial real estate across property types and targets a double-digit net IRR. The capital from GS will be deployed alongside commitments from Cadre’s existing investors, which comprise high-net-worth individuals, family offices and small institutions.
“We’ve had significant demand from multiple banks and investment partners. Our mission, in addition to a focus on quality, is to provide more investors [with] access. I think that will be a natural evolution and extension of our business.”– Ryan Williams, Founder, Cadre
Cadre was founded in 2015 by Ryan Williams, an alumnus of both Goldman Sachs’ investment banking division and Blackstone’s real estate business. The firm has closed on about $1 billion of transactions to date.
LIMITED PARTNER NEWS
- Employees’ Retirement System of the State of Hawaii (HIERS) has committed $50 million to Kayne Anderson Real Estate Partners V. The fund will invest opportunistically in medical office, senior housing and student housing throughout the U.S. The fund launched in the second half of 2016 and is expected to close in the first quarter of 2018. HIERS, a $15.6 billion public pension, maintains a 7% target allocation to real estate.
- San Francisco Employees Retirement System (SFERS), a $24 billion public pension fund, has committed up to $100 million to Real Estate Capital Asia Partners V (RECAP V). The fund employs an opportunistic strategy and targets properties in Asia and Australia. This is the pension’s second investment with SC Capital Partners. SFERS also committed $75 million to Crow Holdings Self-Storage Fund, which focuses on value-added investments in self-storage across the U.S. As of June 30, 2017 SFERS’ real assets portfolio returned 12.6% and comprised 14% of the overall portfolio, slightly below its 17% target. Within real assets, the Board currently allocates approximately 8% to real estate.