Almanac Realty Investorsis on track to complete capital-raising on its current real estate fund, Almanac Realty Securities (ARS) VI, by the middle of next month, according to a presentation made by the firm to the New Mexico State Investment Council (SIC). The vehicle, which invests in public and private real estate companies in the US, is targeting $800 million in commitments.
The fund was launched in June 2011 and has raised $628 million to date, including a $313 million first close in December 2011 and $315 million between May and July of this year. Limited partners so far include the New York City Employees' Retirement System, which committed $150 million; the Pennsylvania Public School Employees' Retirement System, which will invest $100 million; and the City of Philadelphia Board of Pensions and Retirement, which committed $15 million. Additionally, the Los Angeles Department of Water and Power Employees' Retirement Plan committed $20 million in December; the Arkansas Teacher Retirement System committed $30 million in August; the Los Angeles City Employees' Retirement System approved a $25 million commitment this month; and New Mexico SIC agreed to invest $50 million at its board meeting this week.
“This is a non-core/value-add investment and complements our recent heavy additions to core,” a spokesman for the New Mexico SIC told PERE. “It also should be a nice diversifier relative to our recent commitment to Blackstone.”
In June, the state endowment committed $75 million to The Blackstone Group’s Blackstone Real Estate Partners VII, its first opportunistic real estate investment in four years. Its commitment to ARS VI would be its second non-core real estate investment this year. New Mexico SIC previously invested in Almanac’s 2004 vintage fund, Almanac Realty Securities IV, formerly known as Five Arrows Realty Securities IV.
To date, ARS VI has closed on two $110 million transactions, including commitments to Drawbridge Realty Trust, a San Francisco-based owner and developer of office, research & development and industrial properties in the western US; and NRES Holdings, a Kansas City-based private company focused on the acquisition, repositioning and management of multifamily properties primarily in the Midwest and Texas. Almanac also is under contract or in negotiations for three additional transactions on behalf of the fund, which will invest up to 30 percent in any one company, up to 20 percent in non-US investments and no more than 30 percent in common equities.
Almanac was founded in 1981 as Rothschild Realty Managers, but it was renamed in December 2011, after its partnership with financial advisory firm Rothschild North America was dissolved. Its funds platform, Almanac Realty Securities, comprises six funds that have made 31 private placements in public and private real estate companies, representing a total of $2.6 billion of capital. ARS funds target an annual net return of 12 percent, with transactions typically structured as convertible preferred or convertible debt securities.