Alcion closes $542m fund

The Boston-based firm beat its $500 million target and its second fund size for its latest opportunistic vehicle.

Alcion Ventures has closed its third opportunistic fund, the firm said Thursday.

The Boston-based private equity real estate firm closed Alcion Real Estate Partners Fund III at $542.2 million, exceeding its $500 million target. It held a first close for the fund in April 2014 with $269 million. Alcion plans to deploy capital from the fund to invest in seven major metropolitan markets in the US and Canada, according to a company statement, with a focus on value-creation opportunities across property types. The firm manages about $1 billion in assets.

Investors in the fund include Healthcare of Ontario Pension Plan, which invested C$175 million (€113.6 million, $124 million); University of Texas Investment Management Company, which invested $75 million; and Texas Municipal Retirement System and Arizona Public Safety Personnel Retirement System, which each invested $50 million, according to PERE Research & Analytics. Nearly 60 percent of commitments were raised from investors in previous funds, the firm said.

The firm has committed about 35 percent of the fund’s capital to date. In July, the firm partnered with Chicago real estate investor Ameritus Real Estate Investment Management to buy a seven-story office building in the Windy City’s West Loop for $19.4 million. Alcion is also in the process of converting a coffee warehouse into a 125,000 square foot creative office space in New York’s Brooklyn with Lincoln Property.

Probitas Funds Group served as the placement agent for the fund, according to a filing with the US Securities and Exchange Commission.

The firm closed on approximately $500 million for Fund II in August 2011, exceeding its initial target of $400 million. That fund’s equity came from a mix of pension funds, endowments, foundations, family offices and high net worth individuals from the US, Canada and Europe. Investors included the Arizona State Retirement System, Harvard Management Company and the Silicon Valley Community Foundation, according to PERE Research & Analytics.

The second vehicle, which was launched in 2008, was raised for the same strategy that Alcion is pursuing with Fund III.