InsightsKAP’s insights on private equity investor relations and fundraising
Carlyle raises $5 billion for 8th fund; Carleton College hires CIO from BlackRock; ARA launches infra platform
ARA to launch infrastructure funds management business. Singapore-based ARA Asset Management is said to be creating a dedicated platform to expand into the infrastructure asset class to take advantage of growing institutional demand. ARA is currently hiring a team of investment professionals to run the business, which will be based out of Singapore. The infrastructure team will initially be supported by the firm’s private real estate funds management, legal and research functions.
Fed sees record fourth quarter flow of funds into multifamily sector. According to Federal Reserve data released this past week, capital sources pumped $174.9 billion into multifamily debt in Q4 2017. That was $46 billion more than the total for any other previous quarter. According to CoStar data, that is about the same amount of multifamily property sales in the quarter and is the second-highest quarterly sales total this century, surpassed only in the fourth quarter of 2015. The total amount of outstanding multifamily debt has now reached $1.31 trillion.
CAPITAL RAISING UPDATES
Carlyle Group nears final close with $5 billion fundraise. Carlyle Realty Partners VIII is nearing a final close after raising a little over $5 billion for its eighth opportunistic real estate fund. The fund launched October 2016 with a $5 billion target, the largest for Carlyle’s U.S. real estate fund series. Carlyle Realty Partners VIII will focus on investments in office, residential, senior housing, hotel and retail properties across the U.S. The fund’s predecessor held a $4.2 billion final close in September 2015.
Cantor Fitzgerald launches new real estate fund. Cantor Realty Fund III will invest in commercial mortgage loans across the U.S. Cantor’s Real Estate Group provides financing, asset management and advisory solutions to institutional and high-net-worth investors. Cantor’s real estate business is partnered with Cantor Commercial Real Estate (CCRE), a U.S.-based real estate firm specializing in fixed and floating rate commercial mortgage loans and private real estate funds. Founded in 2010, CCRE focuses on office, retail, industrial, multi-family, and hotel properties across the U.S.
Clarion Partners raises $146 million for debt fund. Clarion Partners Debt Investment Fund has held a first close on $145.9 million of its $500 million target. The fund will make mezzanine and special opportunity debt investments in U.S. properties. The firm invests in office, retail, industrial, multifamily residential and hotel properties.
Carleton College hires Chief Investment Officer from BlackRock. Kelsey Deshler, formerly head of manager research at BlackRock, will join the $828 million endowment as CIO later this month. She replaces Jason Matz, who left Carleton after 12 years to take the CIO role at the GHR Foundation in January 2017. Prior to Carleton, Deshler was the global head of manager research at BlackRock for two years. Previously, she worked as a research head and portfolio manager at Credit Suisse.
Starlight Investments appoints Dennis Mitchell as CEO/CIO of new real estate securities platform. The Toronto-based real estate investment and asset management company has launched Starlight Capital, a real estate securities platform that intends to offer publicly listed and private real estate investment products and portfolio management services. The firm has appointed Dennis Mitchell as its new CEO and CIO. Prior to joining Spotlight, Mitchell was the senior vice president and senior portfolio manager of several new and existing funds at Sprott Asset Management. Previously, he served as the executive vice president and chief investment officer of Sentry Investments.
LIMITED PARTNER NEWS
State Universities Retirement System of Illinois (Illinois SURS) has committed $300 million to two real estate managers. The public pension fund committed $200 million and $100 million to open-end core-plus vehicles managed by Blackstone and Carlyle, respectively. The $18.5 billion public pension fund maintains a 9.6% allocation to real estate, below its target of 10%. Of the 9.6%, 5.8% is allocated strictly to private real estate funds.
California State Teachers’ Retirement System (CalSTRS) makes real estate commitments. CalSTRs created a £500 million separate account with Principal Real Estate Investors to focus on industrial assets in the United Kingdom. CalSTRS also committed $400 million to Blackstone Property Partners Europe and €125 million to Meyer Bergman European Retail Partners III. The $225 billion public pension fund maintains a 12% target allocation to real estate.
Los Angeles Country Employees’ Retirement Association (LACERA) committed $50 million to European real estate fund. AG Europe Realty Fund II, a value-added fund focused on office, retail, industrial, hotels and residential properties across Western Europe and the UK, is the first commitment LACERA has made to Angelo, Gordon & Co. The $56.7 billion public pension fund currently has an 11% allocation to real estate, meeting its target.
Policemen’s Annuity and Benefit Fund of Chicago (Chicago Police) committed $10 million to Mesirow Financial Real Estate Value Fund III. The value-added real estate fund will invest in multifamily assets throughout the U.S. The firm is targeting $750 million and has raised $351 million so far. The fund’s predecessor held a $542.5 million final close in June 2015, exceeding its $500 million fundraising goal. The $2.6 billion public pension fund currently allocates 2.85% of assets to real estate, below its 5% target.
Fresno City issues call for value-added/opportunistic real estate managers. NEPC, the defined benefit plan’s investment consultant, is assisting with the search for a value-added/opportunistic real estate manager to run up to $60 million in closed-end funds. Candidates must have at least five years’ experience managing value-added/opportunistic strategies to be considered and funds being proposed must be raising at least $200 million with a final close to be held no earlier than September 30. The RFP is currently available on NEPC’s website.