Altis Property Partners, a Sydney-based private equity real estate firm set up in 2008, has held the final closing of its debut fund, Altis Real Estate Equity Partnership (AREEP1).
The firm, set up by former ICA Property Group executives Paul Notaras, Shaun Hannah and Alastair Wright , raised A$107.1 million (€77 million; $110.25 million) for the fund which will be used to invest in a mix of real estate sectors , transforming properties into core or investment grade quality.
The firm closed on an initial A$92 million last December, originally targeted A$200 million for the fund, but has opted to complete fundraising now. Notoras said at the fund’s first closing that the fundraising environment had been challenging: “Raising [capital] in this market isn’t easy with investors very cautious about opportunistic or return seeking strategies.”
Following the second and final closing, he said the investor pool of the fund comprised a “small number of wholesale and institutional funds seeking to exploit the current cyclical opportunity to generate enhanced returns”.
Altis committed up to 2 percent of the committed capital. Additionally, Altis is also a strategic investor in the fund as it is a shareholder of a private family investment group which has made a A$25 million investment into the fund.
ARREP1 is expected to generate returns of between 16 percent and 18 percent after fees and fund costs but before taxes.
By the time of the first closing, the firm had invested some of the fund’s equity into a mixed retail and office building in North Sydney for A$38.25 million. It has since made a further investment of A$13.1 million in an industrial property in Smeaton, Grange, Sydney, in a deal reflecting a yield of 12 percent on a fully-leased basis. The investments mean the fund is now 35 percent invested.