Altis Property Partners, the Sydney-based private equity real estate firm led by former ICA Property Group executives, has raised A$92 million (€68 million; $91 million) for its debut opportunity fund.
The firm, led by Paul Notaras, Shaun Hannah and Alastair Wright, said in an announcement it had raised the equity from a small number of wholesale and institutional sources for the fund, Altis Real Estate Equity Partnership (AREEP1). The firm is aiming to raise up to A$200 million for the fund in total.
It added that a second closing was anticipated by April 2011. Speaking on the fund’s capital raising activities, Notaras said: “Raising $92 million in this market isn’t easy with investors very cautious about opportunistic or return seeking strategies.”
“Most investors are either purely focussed on increasing their core weightings or have legacy investments they are working through. There were a lot of lessons we learned from the last cycle, particularly in the structuring of investments into opportunistic/value add real estate and these have been incorporated in AREEP1”.
The firm aims to return between 16 percent and 18 percent to investors after fees and fund costs but before taxes.
Notaras said the firm, which was established in 2008, managed to entice commitments on the back of its ‘collaborative’
and ‘transparent’ approach to its investing strategy and fund structuring, including ‘meaningful’ co-investment from the principals.
Altis will invest up to 2 percent of committed capital up to a total of A$3 million. 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.
Central to the firm’s investment strategy is the transforming of assets into core or investment grade assets over a ‘medium’ timeframe.
The firm has made an investment already into a commercial building in North Sydney for A$38.25 million from Becton Investment Management. The property at 2 Elizabeth Plaza comprises 7,750 square metres over one floor of retail and 12 floors of office space. The investment was made at a 10 percent yield on a fully-leased basis.